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Assignment Orr Products manufactures t-shirts. It has the following costs when its production level is 100,000 units (t-shirts): Total costs for 100,000 units Direct materials
Assignment Orr Products manufactures t-shirts. It has the following costs when its production level is 100,000 units (t-shirts): Total costs for 100,000 units Direct materials $ 320,000 Direct labor 40,000 Variable manufacturing overhead 85,000 Fixed manufacturing overhead 120,000 Total manufacturing costs $ 565.000 The company's relevant range extends to 115,000 units. Orr has received a special order for 10,000 t-shirts at a special price of $50,000 for the entire order. The special order t-shirt would use a fabric that is less expensive than the standard fabric used by Orr, which would allow Orr to save $0.50 per t-shirt in direct materials when manufacturing this special order. Orr has the excess capacity to manufacture this special order. Its total fixed costs will not be impacted by the special order. What will happen to Ore's operating income if it accepts this special order
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