Asked by Raheal Pasha on Jul 06, 2024
Verified
Jacoby Company received an offer from an exporter for 30,000 units of product at $15 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$21Unit manufacturing costs:Variable12Fixed5What is the differential revenue from the acceptance of the offer?
A) $450,000
B) $630,000
C) $510,000
D) $120,000
Domestic Unit Sales
The quantity of product units sold within a company's home country.
Differential Revenue
The additional revenue generated from choosing one alternative over another in decision-making processes.
Variable Manufacturing Costs
Costs that fluctuate with the level of production output, including expenses such as raw materials and labor.
- Analyze special offers and their impact on net income.
Verified Answer
LW
Lyndsey WhaleyJul 11, 2024
Final Answer :
A
Explanation :
The differential revenue from accepting the offer is calculated by multiplying the number of units (30,000) by the offer price per unit ($15). Therefore, the differential revenue is 30,000 units * $15/unit = $450,000.
Learning Objectives
- Analyze special offers and their impact on net income.
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