Rate of Return for Investment Assignment

Bluebird Mfg. has received a special one-time order for 6,000 bird feeders at $7 per unit. Bluebird currently produces and sells 65,000 units at $10.00 each. This level represents 65% of its capacity. These bird feeders would be marketed under the wholesaler's name and would not affect Bluebird's sales through its normal channels. Production costs for these units are $6.00 per unit, which includes $5.00 variable cost and $1.00 fixed cost. If Bluebird accepts this additional business, the incremental revenue will be: Multiple Choice 0 $12,000. 0 O $3,600 0 O $30.000 0 O $33,600 0 O $42,000. A company's flexible budget for 15,000 units of production showed total contribution margin of $76,500 and fixed costs, $37.500. The operating income expected if the company produces and sells 18,000 units is

Multiple Choice

Ο $39.000.

Ο $22,200.

Ο S54,300.

Ο $98,700.

Ο $25,735.

Bluebird Mfg. has received a special one-time order for 15.000 bird feeders at $3.80 per unit Bluebird currently produces and sells 75,000 units at $7.80 each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesaler's name and would not affect Bluebird's sales through its normal channels. Production costs for these units are $4.70 per unit, which includes $2.65 variable cost and $2.05 fixed cost. If Bluebird accepts this additional business, the effect on net income will be: Multiple Choice 0 $39,750 decrease 0 $17.250 increase 0 O $57,000 Increase. 0 $39.750 increase. 0 O $13,500 decrease. A new manufacturing machine is expected to cost $288,000, have an eight-year life, and a $32,000 salvage value. The machine will yield an annual Incremental after-tax income of $35,000 after deducting the straight-line depreciation. Compute the accounting rate of return for the investment. .