Wallyworld Company manufactures a product with the following costs per unit at the expected production level of 84,000 units: The company has the capacity to produce 90,000 units. The product regularly sells for $120.
If a wholesaler offered to buy 4,500 units for $100 each, the effect of the special order on income would be a
A) $450,000 increase.
B) $45,000 increase.
C) $153,000 increase.
D) $90,000 decrease.

Question

Wallyworld Company manufactures a product with the following costs per unit at the expected production level of 84,000 units:  The company has the capacity to produce 90,000 units. The product regularly sells for $120.
If a wholesaler offered to buy 4,500 units for $100 each, the effect of the special order on income would be a
A) $450,000 increase. 
B) $45,000 increase. 
C) $153,000 increase. 
D) $90,000 decrease.

Quizplus · Accepted Answer

The Answer of Wallyworld Company manufactures a product with the following costs per unit at the expected production level of 84,000 units:  The company has the capacity to produce 90,000 units. The product regularly sells for $120.
If a wholesaler offered to buy 4,500 units for $100 each, the effect of the special order on income would be a
A) $450,000 increase. 
B) $45,000 increase. 
C) $153,000 increase. 
D) $90,000 decrease.

Wallyworld Company Manufactures a Product with the Following Costs Per