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Ratzlaff Company Has a Current Production Level of 20,000 Units

question 11

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Ratzlaff Company has a current production level of 20,000 units per month. Unit costs at this level are: Ratzlaff Company has a current production level of 20,000 units per month. Unit costs at this level are:   Current monthly sales are 18,000 units. Jim Company has contacted Ratzlaff Company about purchasing 1,500 units at $2.00 each. Current sales would NOT be affected by the one-time-only special order, and variable marketing/distribution costs would NOT be incurred on the special order. What is Ratzlaff Company's change in operating profits if the special order is accepted? A) $400 increase in operating profits B) $400 decrease in operating profits C) $1,800 increase in operating profits D) $1,800 decrease in operating profits Current monthly sales are 18,000 units. Jim Company has contacted Ratzlaff Company about purchasing 1,500 units at $2.00 each. Current sales would NOT be affected by the one-time-only special order, and variable marketing/distribution costs would NOT be incurred on the special order. What is Ratzlaff Company's change in operating profits if the special order is accepted?

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Definitions:

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