Variable manufacturing costs per unit Total fixed manufacturing costs Variable marketing and administrative costs per unit Total fixed marketing and administrative costs $106 $525,000 $33 $290,000 The regular selling price per wicker sofa is $340. The company is analyzing the opportunity to accept a special sales order for 700 wicker sofas at a price of $200 per unit. Foxed costs would increase by $23,000. The company has the capacity to produce 115,000 wicker sofas per year, but is currently producing and selling 11,000 wicker sofas per year. Regular sales will no affected by the special order. If the company any were to accept this special order, h how would operating in ng income be affected? OA Decrease by $42.700 OB. Decrease by $19.700 OC. Increase by $42.700
Variable manufacturing costs per unit Total fixed manufacturing costs Variable marketing and administrative costs per unit Total fixed marketing and administrative costs $106 $525,000 $33 $290,000 The regular selling price per wicker sofa is $340. The company is analyzing the opportunity to accept a special sales order for 700 wicker sofas at a price of $200 per unit. Foxed costs would increase by $23,000. The company has the capacity to produce 115,000 wicker sofas per year, but is currently producing and selling 11,000 wicker sofas per year. Regular sales will no affected by the special order. If the company any were to accept this special order, h how would operating in ng income be affected? OA Decrease by $42.700 OB. Decrease by $19.700 OC. Increase by $42.700
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please help me with calculation thanku
Transcribed Image Text:The following information relates to current production of outdoor wicker sofas at Backyard Posh:
Variable manufacturing costs per unit
Total fixed manufacturing costs
Variable marketing and administrative costs per unit
Total fixed marketing and administrative costs
The regular selling price per wicker sofa is $340. The company is analyzing the opportunity to accept a special sales order for 700 wicker sofas at a price of $200 per unit. Fixed costs would increase by $23,000. The company has the capacity to produce 115,000 wicker sofas per year, but is currently producing and selling 11,000 wicker sofas per year. Regular sales will not be
affected by the special order. If the company were to accept this special order, how would operating income be affected?
O A. Decrease by $42,700
O B. Decrease by $19,700
$106
$525,000
$33
$290,000
OC. Increase by $42,700
OD. Increase by $19,700
C
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education