Benjamin Company had the following results of operations for the past year: A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,000 units at $7.50 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $600 and selling and administrative costs by $300. Assuming Benjamin has excess capacity and accepts the offer, its profits will:
A) Increase by $30,000.
B) Increase by $6,000.
C) Decrease by $6,000.
D) Increase by $5,200.
E) Increase by $4,300.

Question

Benjamin Company had the following results of operations for the past year:  A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,000 units at $7.50 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $600 and selling and administrative costs by $300. Assuming Benjamin has excess capacity and accepts the offer, its profits will:
A) Increase by $30,000. 
B) Increase by $6,000. 
C) Decrease by $6,000. 
D) Increase by $5,200. 
E) Increase by $4,300.

Quizplus · Accepted Answer

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Benjamin Company Had the Following Results of Operations for the Past