Solution-What would be net benefit to the business for coca

What would be net benefit to the business for coca plc

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Reference no: EM132974476

Coca plc is a profitable business that produces a single product. The following information is available concerning the product.

Per unit (£)

Selling price 31

Variable costs (13)

Fixed costs (16)

Profit 2

An overseas business has recently offered to buy 4,900 units of the product for £16 per unit over the next year.

If the order is accepted, the business will have to pay workers overtime rates to complete the order, which will increase variable costs by £1 per unit. It will also means that a separate factory, which is currently not being used but is part of the company´s assets, will have to be used to complete the order. The loan of the factory costs £5,500 per year to the company.

Problem 1: What would be the net benefit (or loss) to the business if the order is accepted?

Reference no: EM132974476

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What would be net benefit to the business for coca plc

Reference no: EM132974476

Reference no: EM132974476

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