PRO Shops has a capacity of 45,000 units, and is currently producing and selling 40,000 at $25 a unit. The present cost structure, on a per unit basis, is: An order for 7,000 units has been received from a Japanese company at a price of $20 per unit. If the order is accepted, profit will
A) Decrease by $2,000
B) Increase by $14,000
C) Increase by $7,000
D) Increase by $4,000

Question

PRO Shops has a capacity of 45,000 units, and is currently producing and selling 40,000 at $25 a unit. The present cost structure, on a per unit basis, is:  An order for 7,000 units has been received from a Japanese company at a price of $20 per unit. If the order is accepted, profit will
A) Decrease by $2,000 
B) Increase by $14,000 
C) Increase by $7,000 
D) Increase by $4,000

Quizplus · Accepted Answer

The Answer of PRO Shops has a capacity of 45,000 units, and is currently producing and selling 40,000 at $25 a unit. The present cost structure, on a per unit basis, is:  An order for 7,000 units has been received from a Japanese company at a price of $20 per unit. If the order is accepted, profit will
A) Decrease by $2,000 
B) Increase by $14,000 
C) Increase by $7,000 
D) Increase by $4,000

PRO Shops Has a Capacity of 45,000 Units, and Is