Walton Company Manufactures a Product with the Following Costs Per

question 44

Multiple Choice

Walton 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.
-A wholesaler has offered to pay $110 a unit for 7,500 units.
If the special order is accepted, the effect on operating income would be a

• A) $75,000 decrease.
• B) $429,000 increase.
• C) $495,000 increase.
• D) $249,000 increase.

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Definitions:

Decimal Places

The number of digits to the right of the decimal point in a number, indicating precision.

Rate

The specified measured quantity of a thing in relation to a unit of another thing, often used in the context of interest, speed, or efficiency.

Decimal Places

The positions of numbers to the right of the decimal point in a decimal number.

Rate

The specified frequency at which an event occurs or a quantity changes over time or per unit.