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Bridgeport Company is a leading manufacturer of sunglasses. One of Bridgeport's products protects the eyes from ultraviolet rays. An upscale sporting goods store has
Bridgeport Company is a leading manufacturer of sunglasses. One of Bridgeport's products protects the eyes from ultraviolet rays. An upscale sporting goods store has contacted Bridgeport about purchasing 28,300 pairs of these sunglasses. Bridgeport's unit manufacturing cost, based on a full capacity of 238,000 units, is as follows: Direct materials Direct labor Manufacturing overhead (75% fixed) Total manufacturing costs $6 4 21 $31 Bridgeport also incurs selling and administrative expenses of $73,800 plus $2 per pair for sales commissions. The company has plenty of excess manufacturing capacity to use in manufacturing the sunglasses. Bridgeport's normal price for these sunglasses is $40 per pair. The sporting goods store has offered to pay $36 per pair. Since the special order was initiated by the sporting goods store, no sales commission will be paid. What would be the effect on Bridgeport's income if the special order were accepted? Bridgeport's income wi T by $ decrease increase
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