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Optus Company Makes Special Equipment Used in Mobile Network Towers

Question 34

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Optus Company makes special equipment used in mobile network towers.Each unit sells for $410.Optus produces and sells 12,500 units per year.They have provided the following income statement data:
Optus Company makes special equipment used in mobile network towers.Each unit sells for $410.Optus produces and sells 12,500 units per year.They have provided the following income statement data:   A foreign company has offered to buy 75 units for a reduced price of $320 per unit.The marketing manager says the sale will not negatively affect the company's regular sales.The sales manager says that this sale will require incremental selling & administrative costs,as it is a one-time deal.The production manager reports that it would require an additional $25,000 of fixed manufacturing costs to accommodate the specifications of the buyer.If Optus accepts the deal,how will this impact operating profit? A)  operating profit will increase by $9400. B)  operating profit will decrease by $15,600. C)  operating profit will increase by $24,000. D)  operating profit will decrease by $9400.
A foreign company has offered to buy 75 units for a reduced price of $320 per unit.The marketing manager says the sale will not negatively affect the company's regular sales.The sales manager says that this sale will require incremental selling & administrative costs,as it is a one-time deal.The production manager reports that it would require an additional $25,000 of fixed manufacturing costs to accommodate the specifications of the buyer.If Optus accepts the deal,how will this impact operating profit?


A) operating profit will increase by $9400.
B) operating profit will decrease by $15,600.
C) operating profit will increase by $24,000.
D) operating profit will decrease by $9400.

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