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Dakota Company has been producing and selling 42,000 hats a year. There are no beginning...

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Accounting

Dakota Company has been producing and selling 42,000 hats a year. There are no beginning and ending inventories. The Dakota Corporation has the capacity to produce 52,000 hats. The following data is available:

Selling price per unit $30

Variable manufacturing costs per unit $13

Variable selling and administrative costs per unit $7

Total fixed manufacturing costs $126,000

Total fixed selling and administrative costs $84,000

If a special order is accepted for 10,000 hats at a price of $25 per unit, net income would ________.

A) increase by $20,000

B) increase by $50,000

C) increase by $90,000

D) decrease by $24,000

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