Zephram Corporation has a plant capacity of 200,000 units per month.Unit costs at capacity are:

Current monthly sales are 190,000 units at $30.00 each.Q,Inc. ,has contacted Zephram Corporation about purchasing 2,500 units at $24.00 each.Current sales would not be affected by the one-time-only special order.What is Zephram's change in operating profits if the one-time-only special order is accepted?
A)$11,000 increase
B)$31,500 increase
C)$22,500 increase
D)$49,000 increase

Question

Zephram Corporation has a plant capacity of 200,000 units per month.Unit costs at capacity are:

Current monthly sales are 190,000 units at $30.00 each.Q,Inc. ,has contacted Zephram Corporation about purchasing 2,500 units at $24.00 each.Current sales would not be affected by the one-time-only special order.What is Zephram's change in operating profits if the one-time-only special order is accepted?
A)$11,000 increase 
B)$31,500 increase 
C)$22,500 increase 
D)$49,000 increase

Quizplus · Accepted Answer

($6.00 + $5.00 + $4.00 + $4.60)= $19.60
($24.00 - $19.60)× 2,500 = $11,000 increase

Zephram Corporation Has a Plant Capacity of 200,000 Units Per