Comfort Ride manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year. The following information relates to current productionof seats:Sale price per unitVariable costs per unit:ManufacturingMarketing and administrative$450OA. Increase by $33,000OB. Decrease by $21,000OC. Increase by $21,000OD. Increase by $285,000$260$80Total fixed costs:Manufacturing$750,000$230,000Marketing and administrativeIf a special sales order is accepted for 3,300 seats at a price of $350 per unit, and fixed costs increase by $12,000, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)

Income from special order = Revenue from special order - incremental cost of special…

Comfort Ride manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year. The following information relates to current production of seats: Sale price per unit Variable costs per unit: Manufacturing Marketing and administrative $450 $260 $80 Total fixed costs: Manufacturing $750,000 $230,000 Marketing and administrative. If a special sales order is accepted for 3,300 seats at a price of $350 per unit, and fixed costs increase by $12,000, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)

Comfort Ride manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year. The following information relates to current production of seats: Sale price per unit Variable costs per unit: Manufacturing Marketing and administrative $450 $260 $80 Total fixed costs: Manufacturing $750,000 $230,000 Marketing and administrative. If a special sales order is accepted for 3,300 seats at a price of $350 per unit, and fixed costs increase by $12,000, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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