Multiple Choice
Blue Technologies manufactures and sells DVD players.Great Products Company has offered Blue Technologies $22 per DVD player for 10,000 DVD players.Blue Technologies' normal selling price is $30 per DVD player.The total manufacturing cost per DVD player is $18 and consists of variable costs of $14 per DVD player and fixed overhead costs of $4 per DVD player.(NOTE: Assume excess capacity and no effect on regular sales. )
Should Blue Technologies accept or reject the special sales order?
A) Accept,because operating income would increase $360,000.
B) Reject,because operating income would decrease $80,000.
C) Accept,because operating income would increase $80,000.
D) Reject,because operating income would decrease $160,000.
Correct Answer:
Verified
Correct Answer:
Verified
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