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