Reference no: EM131780232

Problem

Rylan Corporation received an offer from a potential new customer for 25,000 units of a product at $16 per unit. The acceptance of the offer will not affect Rylan's normal production or domestic sales prices. The following data are available:

Domestic unit sales price        $22
Unit manufacturing costs:
Variable                                 11
Fixed                                     6

What is the amount of the income or loss from the acceptance of the offer?

$125,000 loss
$25,000 income
$125,000 income
$25,000 loss