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Big City Seat Cushions Inc. makes seat cushions for outdoor furniture .Big Citys contribution margin income statement for the month ended March31, 2019 is presented

Big City Seat Cushions Inc. makes seat cushions for outdoor furniture

.Big Citys contribution margin income statement for the month ended

March31, 2019 is presented below: Big City Seat Cushions Inc. Income Statement For the Month Ended

March 31, 2019 Sales in Units 4,200 Sales Revenue $ 58,800 Variable Costs: Manufacturing 25,200 Selling and Administrative

11,000 Total Variable Costs 36,200 Contribution Margin 22,600 Fixed Costs: Manufacturing 12,500

Selling and Administrative 8,700 Total Fixed Costs 21,200 Operating Income $ 1,400

Big City gets a phone call from World wide Outdoor Furniture

They are interested in buying 480 cushions from Big City

. Acceptance of the order will not increase

Big Citys

variable selling and

administrative

costs.

Big City

has enough unused plant capacity to manufacture the a

ddition

al

cushions

(so

no increase in fixed costs)

.

Worldwide

has offered $

7

per

cushion

, which is below the normal sales of $1

4

per

cushion

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