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Rylan Corporation received an offer from an exporter for 25,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:

Domestic unit sales price $22
Unit manufacturing costs:
Variable 11
Fixed 6

What is the differential cost from the acceptance of the offer?

a. $125,000 incomeb. $25,000 lossc. $125,000 lossd. $25,000 income

Respuesta :

facundobuzzetti

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Rylan Corporation received an offer from an exporter for 25,000 units of a product at $16 per unit.

Unit manufacturing costs:

Variable 11

Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.

Effect on income= 25,000*(16 - 11)= $125,000 increase

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