Wannabee Company manufactures a product with the following costs per unit at the expected production level of 84,000 units: $$\begin{array} { l r }
\text { Direct materials } & \$ 12 \
\text { Direct labor } & 36 \
\text { Variable manufacturing overhead } & 18 \
\text { Fixed manufacturing overhead } & 24
\end{array}$$ The company has the capacity to produce 90,000 units. The product regularly sells for $120. If a wholesaler offered to buy 4,500 units for $100 each, the effect of the special order on income would be a
A)$45,000 increase.
B)$153,000 increase.
C)$450,000 increase.
D)$90,000 decrease.

Question

Wannabee Company manufactures a product with the following costs per unit at the expected production level of 84,000 units: $$\begin{array} { l r } 
\text { Direct materials } & \$ 12 \
\text { Direct labor } & 36 \
\text { Variable manufacturing overhead } & 18 \
\text { Fixed manufacturing overhead } & 24
\end{array}$$ The company has the capacity to produce 90,000 units. The product regularly sells for $120. If a wholesaler offered to buy 4,500 units for $100 each, the effect of the special order on income would be a
A)$45,000 increase.
B)$153,000 increase.
C)$450,000 increase.
D)$90,000 decrease.

Quizplus · Accepted Answer

The Answer of Wannabee Company manufactures a product with the following costs per unit at the expected production level of 84,000 units: $$\begin{array} { l r } 
\text { Direct materials } & \$ 12 \
\text { Direct labor } & 36 \
\text { Variable manufacturing overhead } & 18 \
\text { Fixed manufacturing overhead } & 24
\end{array}$$ The company has the capacity to produce 90,000 units. The product regularly sells for $120. If a wholesaler offered to buy 4,500 units for $100 each, the effect of the special order on income would be a
A)$45,000 increase.
B)$153,000 increase.
C)$450,000 increase.
D)$90,000 decrease.

Wannabee Company Manufactures a Product with the Following Costs Per