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Rexeleg Company Manufactures a Product with the Following Costs Per

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Rexeleg Company manufactures a product with the following costs per unit at the expected production of 40,000 units:
Rexeleg Company manufactures a product with the following costs per unit at the expected production of 40,000 units:     The company has the capacity to produce 50,000 units.The product regularly sells for $50.A wholesaler has offered to pay $43 per unit for 3,000 units.   If the firm chooses to accept the special order and reject some regular sales, the effect on operating income would be a: A)  $30,000 increase. B)  $21,000 decrease. C)  $64,000 increase. D)  $45,000 decrease. The company has the capacity to produce 50,000 units.The product regularly sells for $50.A wholesaler has offered to pay $43 per unit for 3,000 units.

If the firm chooses to accept the special order and reject some regular sales, the effect on operating income would be a:

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Definitions:

Financial Statements

Formal records of the financial activities and position of a business, person, or entity, important for decision making.

Accounting Depreciation

The systematic allocation of the cost of a tangible asset over its useful life for financial reporting purposes.

Replacement Cost

Cost to replace a firm’s assets. Also called reproduction cost.

Economic Income

The sum of a company's net cash flow and the change in present value of a company's cash flows in a given period.

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