A Business Received an Offer from an Exporter for 5,000

question 68

Multiple Choice

A business received an offer from an exporter for 5,000 units of product at $10 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: $\begin{array}{lrr} \text { Domestic urit sales price } &\$12\\ \text { Unit manufactuing costs } &\\ \text { Variable } &9\\ \text { Fixed} &1\\\end{array}$

Based on the above data, what is the differential revenue from the acceptance of the offer?

• A) $45,000
• B) $40,000
• C) $50,000
• D) $60,000

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Definitions:

Book to Capital

The ratio of a company's net book value of its assets to its capital, indicating how much of the company's assets are financed by shareholder capital.

Purchases Journal

A journal used to record all purchases of goods and services on credit for a company's operational needs.

Creditor Accounts

Accounts payable to suppliers or lenders from whom a business has borrowed money or purchased goods on credit.

Accounts Payable Cr.

Accounts Payable Credit refers to the credit balance or entry in the accounts payable account, indicating the total amount the company owes to its suppliers or vendors.