Able Company's Unit Manufacturing Cost Is $\begin{array}{lr}\text { Variable Costs } & \$ 50 \\\text { Fixed Costs } & 25\end{array}$

question 91

Multiple Choice

Able Company's unit manufacturing cost is: $\begin{array}{lr}\text { Variable Costs } & \$ 50 \\\text { Fixed Costs } & 25\end{array}$ A special order for 2,000 units has been received from a foreign company.The unit price requested is $55.The normal unit price is $80.If the order is accepted, unit variable costs will increase by $2 for additional freight costs.If the order is accepted, incremental profit (loss) will be

• A)$(46,000).
• B)$6,000.
• C)$(40,000).
• D)$10,000.

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Definitions:

External Users

Individuals or entities outside of a company who use its financial statements and other reports to make informed decisions, such as investors, creditors, and regulatory agencies.

Internal Users

Individuals or groups within an organization, such as management and employees, who use financial information to make decisions about operations.

Managerial Accounting

The methodology of pinpointing, quantifying, evaluating, and understanding accounting data to assist managers in making knowledgeable decisions for their business.

Work in Process Inventory

Work in Process Inventory consists of partially completed goods that are in the process of being manufactured but are not yet finished products.