Lucas Company produces 16,000 units, operating at 80 percent of capacity. Spielberg Corp. offers to...
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Lucas Company produces 16,000 units, operating at 80 percent of capacity. Spielberg Corp. offers to buy 4,000 additional units at $45 per unit. Coppola, Inc. wants to buy 3,000 additional units at $48 per unit. If Lucas' variable costs are $30 per unit, which offer should it accept and what will be the effect of accepting that offer on net income?
A. Spielberg, $60,000 increase
B. Spielberg, $180,000 increase
C. Coppola, $54,000 increase
D. Coppola, $144,000 increase
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