Markson Company had the following results of operations for the past year: Contribution margin income statement Per Unit Annual TotalSales (8,000 units) $ 20.00 $ 160,000Variable costs    Direct materials 4.25 34,000Direct labor 6.00 48,000Overhead 2.00 16,000Contribution margin 7.75 62,000Fixed costs    Fixed overhead 4.25 34,000Income $ 3.50 $ 28,000A foreign company offers to buy 2,000 units at $14 per unit. In addition to variable manufacturing and administrative costs, selling these units would increase fixed overhead by $1,600 for the purchase of special tools. Markson’s annual productive capacity is 12,000 units. If Markson accepts this additional business, its profits will:Multiple ChoiceDecrease by $5,100.Decrease by $5,650.Increase by $1,900.Decrease by $1,600.Increase by $3,500.

Item 9Lattimer Company had the following results of operations for the past year: Contribution margin income statement Per Unit Annual TotalSales (15,000 units) $ 12.00 $ 180,000Variable costs    Direct materials 1.50 22,500Direct labor 4.00 60,000Overhead 1.00 15,000Contribution margin 5.50 82,500Fixed costs    Fixed overhead 1.00 15,000Fixed selling and administrative expenses 1.40 21,000Income $ 3.10 $ 46,500A foreign company offers to buy 5,000 units at $7.50 per unit. In addition to variable costs, selling these units would add a $0.25 selling expense for export fees. Lattimer’s annual production capacity is 25,000 units. If Lattimer accepts this additional business, the special order will yield a:Multiple Choice$2,000 loss.$8,250 loss.$3,750 profit.$3,250 loss.$5,000 profit.

Lattimer Company had the following results of operations for the past year: Contribution margin income statement Per Unit Annual TotalSales (15,000 units) $ 12.00 $ 180,000Variable costs    Direct materials 1.50 22,500Direct labor 4.00 60,000Overhead 1.00 15,000Contribution margin 5.50 82,500Fixed costs    Fixed overhead 1.00 15,000Fixed selling and administrative expenses 1.40 21,000Income $ 3.10 $ 46,500A foreign company offers to buy 5,000 units at $7.50 per unit. In addition to variable costs, selling these units would add a $0.25 selling expense for export fees. Lattimer’s annual production capacity is 25,000 units. If Lattimer accepts this additional business, the special order will yield a:

Cornish Company had the following results of operations for the past year: Contribution margin income statement Per Unit Annual TotalSales (20,000 units) $ 22.00 $ 440,000Variable costs    Direct materials 4.00 80,000Direct labor 6.00 120,000Overhead 2.00 40,000Contribution margin 10.00 200,000Fixed costs    Fixed overhead 3.00 60,000Fixed selling and administrative expenses 4.60 92,000Income $ 2.40 $ 48,000A foreign company offers to buy 3,000 units at $17.00 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $600 and fixed selling and administrative costs by $900. If Cornish accepts the offer, its profits will:Multiple ChoiceDecrease by $4,500.Increase by $4,500.Increase by $15,000.Decrease by $300.Increase by $13,500.

Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two operating departments using different allocation bases. The following information is available for the current period: Office Expenses Total Allocation BaseSalaries $ 30,000 Number of employeesDepreciation 20,000 Cost of goods soldAdvertising 40,000 Percentage of total sales Department Number of employees Sales Cost of goods soldDrilling 1,000 $ 325,000 $ 75,000Grinding 1,500 475,000 125,000Total 2,500 $ 800,000 $ 200,000The amount of the advertising cost that should be allocated to Grinding for the current period is:

A company's flexible budget for 21,000 units of production showed total contribution margin of $96,600 and fixed costs, $37,300. The income expected if the company produces and sells 24,000 units is: