A business received an offer from an exporter for 10,000 units of product at $13.50 per unit.The acceptance of the offer will not affect normal production or domestic sales prices.The following data are available: ? $\begin{array}{lr}
\text { Domestic unit sales price } & \$ 21 \
\text { Unit manufacturing costs: } & \
\text { Variable } & 12 \
\text { Fixed } & 5
\end{array}$ ?
What is the amount of the gain or loss from acceptance of the offer?
A) $75,000 loss
B) $40,000 gain
C) $15,000 gain
D) $85,000 gain

Question

Quizplus · Accepted Answer

The gain from accepting the offer is calculated by subtracting the variable cost from the offer price and multiplying by the number of units: ($13.50 - $12) * 10,000 = $15,000 gain. Fixed costs are not considered as they are not affected by the decision.

A Business Received an Offer from an Exporter for 10,000