Question

Brilliant, Inc. reported the following results from the sale of 31,000 units of IT-54: Sales Variable manufacturing costs Fixed manufacturing costs Variable selling costs Fixed administrative costs $523,000 310,000 155,000 55,100 37,600 Extra Company has offered to purchase 3,600 IT-54s at $14 each. Brilliant has available capacity, and the president is in favor of accepting the order. She feels it would be profitable because no variable selling costs will be incurred. The plant manager is opposed because the "full cost" of production is $15. Which of the following correctly notes the change in income if the special order is accepted? Multiple Choice a.$3,600 decrease. b.$3.600 increase. c.$14400 decrease d.$14.400 increase. e.None of the answers is correct.

Answer 1

d.$14,400 increase

Step-by-step explanation:

The computation of the given question is shown below:-

Per unit Total 3,600 units

Incremental revenue $14 $50,400

Incremental cost $10 $36,000

Incremental income $14,400

Variable manufacturing cost per unit = $310,000 ÷ 31,000

= $10