2. Incremental costs are the additional costs incurred if acompany pursues a certain course...

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Accounting

2. Incremental costs are the additional costs incurred if acompany pursues a certain course of action. True or False
15.
Benjamin Company had the following results of operations for thepast year:
Sales (13,900 unitsat $18) $ 250,200
Direct materials and directlabor $ 69,500
Overhead (20% variable) 13,900
Selling and administrativeexpenses (all fixed) 20,850 (104,250 )
Operating income $ 145,950

A foreign company (whose sales will not affect Benjamin’s market)offers to buy 3,475 units at $14.40 per unit. In addition tovariable manufacturing costs, selling these units would increasefixed overhead by $930 and selling and administrative costs by$620. Assuming Benjamin’s productive capacity is 13,900 units peryear and accepts the offer, its profits will:
Multiple Choice
Decrease by $12,510.
Decrease by $14,060.
Decrease by $ 133,440.
Increase by $ 10,960.
Increase by $ 4,095.

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Yes it is true that the additional costs are the costs incurred if a company pursues a certain couse of action Question 15 Note 1 Production capacity of the company 13900 units LESS Number of units produced for the special order from the foreign compnay 3475 units Number of units produced other than for the special order 10425 units Calculation of See Answer

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In: Accounting2. Incremental costs are the additional costs incurred if acompany pursues a certain course of...2. Incremental costs are the additional costs incurred if acompany pursues a certain course of action. True or False15.Benjamin Company had the following results of operations for thepast year:Sales (13,900 unitsat $18)$250,200Direct materials and directlabor$69,500Overhead (20% variable)13,900Selling and administrativeexpenses (all fixed)20,850(104,250)Operating income$145,950A foreign company (whose sales will not affect Benjamin’s market)offers to buy 3,475 units at $14.40 per unit. In addition tovariable manufacturing costs, selling these units would increasefixed overhead by $930 and selling and administrative costs by$620. Assuming Benjamin’s productive capacity is 13,900 units peryear and accepts the offer, its profits will:Multiple ChoiceDecrease by $12,510.Decrease by $14,060.Decrease by $ 133,440.Increase by $ 10,960.Increase by $ 4,095.


Sales (13,900 unitsat $18)			$	250,200
Direct materials and directlabor	$	69,500
Overhead (20% variable)		13,900
Selling and administrativeexpenses (all fixed)		20,850		(104,250	)
Operating income			$	145,950