Clear Sky Sailmakers manufactures sails for sailboats. The company has the capacity to produce 15,000 sails per year, but is currently producing and selling 10,000 sails per year. The following information relates to current production: Sale price per unit $250 Variable costs per unit: Manufacturing $157 Marketing and administrative $42 Fixed Cost per Unit Manufacturing $75 Marketing and administrative $20 If a special sales order is accepted for 4,910 sails at a price of $234 per unit, and fixed costs remain unchanged, how would operating income be affected? (assume regular sales are not affected by the special order) If accepting the special order would reduce income, use a negative number for your answer.
Clear Sky Sailmakers manufactures sails for sailboats. The company has the capacity to produce 15,000 sails per year, but is currently producing and selling 10,000 sails per year. The following information relates to current production:
|
Sale price per unit |
$250 |
|
|
|
|
Variable costs per unit: |
|
|
Manufacturing |
$157 |
|
Marketing and administrative |
$42 |
|
|
|
|
Fixed Cost per Unit |
|
|
Manufacturing |
$75 |
|
Marketing and administrative |
$20 |
If a special sales order is accepted for 4,910 sails at a price of $234 per unit, and fixed costs remain unchanged, how would operating income be affected? (assume regular sales are not affected by the special order) If accepting the special order would reduce income, use a negative number for your answer.
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