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2. Ecton Company produces a wide variety of valves for use by manufacturers. The following income statement reflects the profitability of model #327a. Ecton produces
2. Ecton Company produces a wide variety of valves for use by manufacturers. The following income statement reflects the profitability of model #327a. Ecton produces 35,000 of the valves each year, but it has the capacity to produce up to 50,000. + Sales (35,000 units at $8 each) $280,000 Variable manufacturing and selling costs 206,500 Contribution margin $73,500 Fixed costs 21,000 Operating income $52,500 A foreign distributor has offered to buy 10,000 of the valves for $7.50 per unit. How much will Ecton's income change if they decide to accept the order? A. $5,000 decrease B. $10,000 increase C. $16,000 increase D. $80,000 increase
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