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Author Question: Venus Corporation provided the following information regarding its single product:Direct materials ... (Read 102 times)

s.tung

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Venus Corporation provided the following information regarding its single product:

Direct materials used $240,000
Direct labour incurred$420,000
Variable manufacturing overhead $160,000
Fixed manufacturing overhead $100,000
Variable selling and administrative expenses $60,000
Fixed selling and administrative expenses $20,000

The regular selling price for the product is $75.  The annual quantity of units produced and sold is 20,000 units (the costs above relate to the 20,000 units production level). There was no beginning inventory.


What would be the effect on Venus Corporation's operating income of accepting a special order for 3,000 units at a sale price of $65 per product? The company has excess capacity and regular sales will not be affected by this special order.
◦ Increase by $327,000
◦ Decrease by $63,000
◦ Decrease by $327,000
◦ Increase by $63,000


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Marked as best answer by s.tung on Jan 4, 2020

harveenkau8139

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s.tung

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Reply 2 on: Jan 4, 2020
Wow, this really help


vickyvicksss

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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