currently producing and selling 75,000 seats per year. The following information relates to current production Sale price per unit Variable costs per unit: Manufacturing Marketing and administrative Total fixed costs Manufacturing Marketing and administrative $400 O Increase by $230,000 O Increase by $90,000 O Decrease by $80,000 O Increase by $80,000 $220 $50 $750,000 $200,000 If a special sales order is accepted for 3,000 seats at a price of $300 per unit, and fixed costs increase by $10,000, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)
currently producing and selling 75,000 seats per year. The following information relates to current production Sale price per unit Variable costs per unit: Manufacturing Marketing and administrative Total fixed costs Manufacturing Marketing and administrative $400 O Increase by $230,000 O Increase by $90,000 O Decrease by $80,000 O Increase by $80,000 $220 $50 $750,000 $200,000 If a special sales order is accepted for 3,000 seats at a price of $300 per unit, and fixed costs increase by $10,000, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sky High Seats manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but is
currently producing and selling 75,000 seats per year. The following information relates to current production:
Sale price per unit
Variable costs per unit:
Manufacturing
Marketing and administrative
Total fixed costs
Manufacturing
Marketing and administrative
$400
O Increase by $230,000
O Increase by $90,000
O Decrease by $80,000
O Increase by $80,000
$220
$50
$750,000
$200,000
If a special sales order is accepted for 3,000 seats at a price of $300 per unit, and fixed costs increase by $10,000, how would
operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)
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