Answer:
Effect in income= $5,400
Explanation:
Giving the following information:
It costs Waterway Company $26 per unit ($18 variable and $8 fixed) to produce its product.
A foreign wholesaler offers to purchase 5400 units at $21 each.
Waterway would incur special shipping costs of $2 per unit if the order were accepted.
Waterway has sufficient unused capacity to produce the 5400 units.
Because it is a special offer and there is unused capacity, we will not have into account the fixed costs.
Unitary cost= $18 + $2= $20
Effect in income= 5,400*(21 - 20)= $5,400
