Markson company had the following results of operations

Reference no: EM131022226

28] Markson Company had the following results of operations for the past year:

Sales (8,000 units at $19.50)		$156,000
Variable manufacturing costs	$84,000
Fixed manufacturing costs	14,500
Variable selling and administrative expenses	10,000
Fixed selling and administrative expenses	19,500	(128,000)
Operating income		$28,000

A foreign company whose sales will not affect Markson's market offers to buy 2,000 units at $13.25 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $1,550 for the purchase of special tools. If Markson accepts this additional business, its profits will:

Decrease by $1,550.

Increase by $3,000.

Decrease by $5,500.

Decrease by $4,550.

Increase by $1,450.

Reference no: EM131022226

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