Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3.90 per...
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Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3.90 per unit. Bluebird currently produces and sells 75,000 units at $7.90 each. This level represents 80% of its capacity. Production costs for these units are $4.85 per unit, which includes $2.70 variable cost and $2.15 fixed cost. If Bluebird accepts this additional business, the effect on net income will be:
$58,500 increase.
$18,000 increase.
$40,500 increase.
$14,250 decrease.
$40,500 decrease.
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