Zildjian Corporation Manufactures a Single Product with the Following Unit

question 96

Multiple Choice

Zildjian Corporation manufactures a single product with the following unit costs for 1,250 units: Recently, a company approached Zildjian Corporation about buying 100 units for $5,100 each. Currently, the models
Are sold to dealers for $7,900.
Assume there is additional capacity for 60 more units and the firm has to reduce regular customer sales by 40 units in order to contract the special order. There are selling expenses on only the sales to the regular customers. What is the net income if the special order of 100 units is accepted?

• A) $1,353,960
• B) $894,960
• C) $1,029,600
• D) $918,000

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Definitions:

Journal Entries

Records of financial transactions in the accounting system, indicating the accounts and amounts to be debited and credited.

Equipment Cost

The purchase price of machinery and tools required for manufacturing or providing services, excluding ongoing operating expenses.

Salvage Value

The calculated sale amount an asset is deemed to achieve after its useful life concludes.

Useful Life

The duration of time over which an asset is expected to be usable for its intended purpose.