Ask Question
2 April, 17:48

It costs Calient Company $46 per unit ($27 variable and $19 fixed) to produce its product, which normally sells for $58 per unit. A Brazilian wholesaler offers to purchase 5,000 units at $36 each. Client would incur special shipping costs of $5 per unit if the order were accepted. Galiente has sufficient unused capacity to produce the 5,000 units. If the special order is accepted, what will be the effect on net income?

+3
Answers (1)
  1. 2 April, 19:22
    0
    The effect on net income will be $25,000, meaning the company will lose $25,000.

    Explanation:

    The Wholesaler offers = 5000*$36

    = $180,000

    Special shipping cost = 5000*$5

    = $25,000

    but the actual cost per unit = 5000*$46

    = $230,000

    The effect on the net income = $230,000 - $180,000 - $25,000

    = $25,000

    Therefore, the effect on net income will be $25,000. this means the company will lose $25,000.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “It costs Calient Company $46 per unit ($27 variable and $19 fixed) to produce its product, which normally sells for $58 per unit. A ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers