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Omark Corporation Currently Manufactures a Subassembly for Its Main Product

question 91

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Omark Corporation currently manufactures a subassembly for its main product.The variable costs per unit are $48, in addition to a $6 charge based on estimated selling expenses.R-Corp has contacted Omark with an offer to sell them 5,000 of the subassemblies for $44.00 each.Omark will eliminate $50,000 of fixed overhead if it accepts the proposal.What is increase or decrease in profit from accepting the offer?

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Definitions:

Imports

Products and services imported into a country from overseas to be sold.

Financial Assets

Assets that derive value because of a contractual claim, such as stocks, bonds, and bank deposits.

Current Account

A component of a country's balance of payments that measures the trade of goods and services, net earnings on investments, and transfer payments.

Tangible Products

Physical items that can be seen, touched, and used, as opposed to services or digital goods.

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