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Carla Vista Industries manufactures a component used by car manufacturers. Carla Vista can produce 1018000 components per year. A foreign car manufacturer has approached Carla
Carla Vista Industries manufactures a component used by car manufacturers. Carla Vista can produce 1018000 components per year. A foreign car manufacturer has approached Carla Vista with an offer to purchase 129000 components at price of $6 per unit. Carla Vista's results for last year are as follows: Sales (909000 at $8) $7272000 Variable costs 2727000 Contribution margin 4545000 Fixed costs 2359000 Operating income $2186000 If Carla Vista accepts the offer, it will only be able to sell 889000 units at the regular price due to its capacity constraints. What will Carla Vista's total operating income be next year if it accepts the offer? O $2800000 O $2473000 O $2731000 O $4832000
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