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1. Woody Company manufactures slippers and sells them at S10 a pair. Variable manufacturing cost is $4.50 a pair, and allocated fixed manufacturing cost is
1. Woody Company manufactures slippers and sells them at S10 a pair. Variable manufacturing cost is $4.50 a pair, and allocated fixed manufacturing cost is $1.50 a pair. It has enough idle capacity available to accept a one-time-only special order of 20,000 pairs of slippers at $6 a pair. Woody will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales? Show your calculations
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