16. Race Corporation manufactures batons. Race can manufacture 300,000 batons a year at a variable cost of $750,000 and a fixed cost of $450,000. Based on Race's predictions for next year, 240,000 batons will be sold at the regular price of $5.00 each. In addition, a special order was placed for 60,000 batons to be sold at a 40% discount off the regular price. Total fixed costs would be unaffected by this order. By what amount would the company's operating income be increased or decreased as a result of the special order? Select one: a. $180,000 increase. b. $60,000 decrease. c. $36,000 increase. d. $30,000 increase.

16. Race Corporation manufactures batons. Race can manufacture 300,000 batons a year at a variable cost of $750,000 and a fixed cost of $450,000. Based on Race's predictions for next year, 240,000 batons will be sold at the regular price of $5.00 each. In addition, a special order was placed for 60,000 batons to be sold at a 40% discount off the regular price. Total fixed costs would be unaffected by this order. By what amount would the company's operating income be increased or decreased as a result of the special order? Select one: a. $180,000 increase. b. $60,000 decrease. c. $36,000 increase. d. $30,000 increase.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EB: Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all...

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