Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $2.40 per unit. Bluebird currently produces and sells 75,000 units at $6.40 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 $3.60 per unit, which includes $1.95 variable cost and $1.65 fixed cost. If Bluebird accepts this additional business, the effect on net income will be: Multiple Choice $29,250 decrease. $18,000 decrease. $36,000 increase. $29,250 increase. $6,750 increase.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $2.40 per unit. Bluebird currently produces and sells 75,000 units at $6.40
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 $3.60 per unit, which includes $1.95 variable cost and $1.65 fixed cost. If Bluebird
accepts this additional business, the effect on net income will be:
Multiple Choice
$29,250 decrease.
$18,000 decrease.
$36,000 increase.
$29,250 increase.
$6,750 increase.
Transcribed Image Text:Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $2.40 per unit. Bluebird currently produces and sells 75,000 units at $6.40 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 $3.60 per unit, which includes $1.95 variable cost and $1.65 fixed cost. If Bluebird accepts this additional business, the effect on net income will be: Multiple Choice $29,250 decrease. $18,000 decrease. $36,000 increase. $29,250 increase. $6,750 increase.
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