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Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3.50 per unit. Bluebird currently produces and sells 75,000 units at
Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3.50 per unit. Bluebird currently produces and sells 75,000 units at $7.50 each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesaler's name and would not affect Bluebird's sales through its normal channels. Production costs for these units are $4.25 per unit, which includes $2.50 variable cost and $1.75 fixed cost. If Bluebird accepts this additional business, the effect on net income will be: $11,250 decrease. $37,500 increase. $37,500 decrease. $15,000 increase. $52,500 increase.
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