Lego Company manufactures chairs. Annual maximum capacity is 100,000. It currently produces and sells 75,000 chairs per year. The following information relates to current production: Sale price per unit $430 Variable costs per unit: Manufacturing Marketing and administrative Total fixed costs: Manufacturing $240 $80 decrease of 222,000 increase of 287,700 increase of 81,000 increase of 296,000 $760,000 $220,000 Marketing and administrative Regular sales are not affected by the special order. There is a special order received for 2700 chairs at a price of $350 per uni If the company decides to go ahead with the special order then fixed costs increase by $6,600, and variable marketing and administrative costs for that order are $1 per unit, If a special sales order is accepted how would operating income be affected?

Lego Company manufactures chairs. Annual maximum capacity is 100,000. It currently produces and sells 75,000 chairs per year. The following information relates to current production: Sale price per unit $430 Variable costs per unit: Manufacturing Marketing and administrative Total fixed costs: Manufacturing $240 $80 decrease of 222,000 increase of 287,700 increase of 81,000 increase of 296,000 $760,000 $220,000 Marketing and administrative Regular sales are not affected by the special order. There is a special order received for 2700 chairs at a price of $350 per uni If the company decides to go ahead with the special order then fixed costs increase by $6,600, and variable marketing and administrative costs for that order are $1 per unit, If a special sales order is accepted how would operating income be affected?

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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