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6 points 24. Oxon Company has received a request for a special order of 6,000 units of product J200 for $13.70 each. The product J200's
6 points 24. Oxon Company has received a request for a special order of 6,000 units of product J200 for $13.70 each. The product J200's unit product cost is $11.50, as shown in the below table. Direct labor is a variable cost. The special order will have no effect on the company's total fixed manufacturing overhead costs. The customer wants some modifications to be made to the product J200, which will increase the variable costs by $8.10 per unit and will also require an investment of $20,000 in special molds that will have no salvage value. This special order will have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, what is the effect on the company's overall net operating income? order is accepted, what is the effect on the company's overall net operating income? Item: Direct Materials Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead Unit Product Cost Amount $2.50 per unit 1.90 per unit 2.30 per unit 4.80 per unit $11.50 per unit The overall net operating income will increase by $13,200. The overall net operating income will decrease by $21,300. The overall net operating income will decrease by $26,600. The overall net operating income will decrease by $55,400. None of the above
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