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The following information relates to a product produced by Creamer Company: $24 Direct materials Direct labor Variable overhead Fixed overhead Unit cost 15 30 18 $87 Fixed selling costs are $500,000 per year, and variable selling costs are $12 per unit sold

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The following information relates to a product produced by Creamer Company: $24 Direct materials Direct labor Variable overhead Fixed overhead Unit cost 15 30 18 $87 Fixed selling costs are $500,000 per year, and variable selling costs are $12 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for $120 each. A customer has offered to buy 60,000 units for $90 each. If the firm produces the special order, the effect on income would be a $540,000 increase. $360,000 increase. $540,000 decrease. $360,000 decrease.
A company expects the following sales for the coming year: 3rd Quarter 70,000 4th Quarter 90,000 1st Quarter 2nd Quarter Units 50,000 40,000 Average selling price $6 $6 Budgeted sales revenue for the year is: $6 $6 $1,280,000 $420,000 $960,000 $1,500,000