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income be affected? (NOTE: Assume regular sales are not affected by the special order.) OA. Increase by $88,000 OB. Increase by $33,000 OC. Increase by $220,000 O D. Decrease by $88,000

income be affected? (NOTE: Assume regular sales are not affected by the special order.) OA. Increase by $88,000 OB. Increase by $33,000 OC. Increase by $220,000 O D. Decrease by $88,000

FINANCIAL ACCOUNTING
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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If a special sales order is accepted for 5,500 widgets at a price of $40 per unit, fixed costs remain unchanged, and no variable marketing and administrative costs will be incurred for this order, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) A. Increase by $88,000 B. Increase by $33,000 C. Increase by $220,000 D. Decrease by $88,000
Transcribed Image Text:If a special sales order is accepted for 5,500 widgets at a price of $40 per unit, fixed costs remain unchanged, and no variable marketing and administrative costs will be incurred for this order, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) A. Increase by $88,000 B. Increase by $33,000 C. Increase by $220,000 D. Decrease by $88,000
Widget Inc. manufactures widgets. The company has the capacity to produce 100,000 widgets per year, but it currently produces and sells 75,000 widgets per year. The following information relates to current production: Sales price per unit Variable costs per unit: Manufacturing Marketing and administrative Total fixed costs: Manufacturing Marketing and administrative $42 $24 $10 $78,000 $23,000
Transcribed Image Text:Widget Inc. manufactures widgets. The company has the capacity to produce 100,000 widgets per year, but it currently produces and sells 75,000 widgets per year. The following information relates to current production: Sales price per unit Variable costs per unit: Manufacturing Marketing and administrative Total fixed costs: Manufacturing Marketing and administrative $42 $24 $10 $78,000 $23,000
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