widget inc. manufacturers widgets. The company has the capacity to produce 100,000 widgets per year,...
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widget inc. manufacturers 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.
n Widget Inc. manufactures widgets. The company has the capacity to produce 100,000 widgets per but it currently produces and sells 75,000 widgets per year. The following information relates to year, current production: Sale price per unit $4 Variable costs per unit: Manufacturing Marketing and administrative $23 otal fixed costs: Manufacturing Marketing and administrative $78,000 $23,000 If a special sales order is accepted for 2800 widgets at a price of $36 per unit,fixed costs increase by $9000, and variable marketing and administrative costs for that order are $3 per unit, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)
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