Kirby Company can manufacture a product for $52 per unit ($36 variable and $16 fixed). A foreign wholesaler offers to purchase 10,000 units at $42 each, although the normal selling price is $76 per unit. If the order is accepted, Kirby would incur special shipping costs of $4 per unit. Kirby has sufficient unused capacity to produce the 10,000 units. If the special order is accepted, what will be the effect on net income?

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11-06-2024
Business

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Kirby Company can manufacture a product for $52 per unit ($36 variable and $16 fixed). A foreign wholesaler offers to purchase 10,000 units at $42 each, although the normal selling price is $76 per unit. If the order is accepted, Kirby would incur special shipping costs of $4 per unit. Kirby has sufficient unused capacity to produce the 10,000 units. If the special order is accepted, what will be the effect on net income?

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