contestada

Swifty Corporation’s unit manufacturing cost is:

Variable Costs
$50
Fixed Costs
25


A special order for 2000 units has been received from a foreign company. The unit price requested is $53. The normal unit price is $79. If the order is accepted, unit variable costs will increase by $2 for additional freight costs. If the order is accepted, incremental profit (loss) will be

a.$8000.
b.$(44000).
c.$(46000).
d.$2000.

Respuesta :

chilljain33

The incremental profit for Swifty Corporation upon the acceptance of the order will amount to around $2000.

What is incremental profit?

According to the information provided, the actual variable cost upon acceptance of the order will be $52. Now, the margin for Swifty Corporation will be 53 – 52 = $1.

As the order is received for a production of 2000 units, the net incremental profit for acceptance of such order will be 2000 x $1 = $2,000.

Hence, option D holds true regarding the incremental profit of Swifty Corporation.

Learn more about incremental profit here:

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