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Clear Sky Sailmakers manufactures sails for salboats. The company has the capacity to produce 15.000 sails per year, but is currently producing and selling 10,000
Clear Sky Sailmakers manufactures sails for salboats. The company has the capacity to produce 15.000 sails per year, but is currently producing and selling 10,000 sails per year. The following information relates to current production Sale price per unit $250 Variable costs per unit Manufacturing $165 Marketing and administrative $50 Total fixed costs Manufacturing $750,000 Marketing and administrative $200.000 if Clear Sky Sailmakers accepts a special order for 2,500 sails at a price of $205 per unit, fixed costs increase by $14,000, and variable marketing and administrative costs for that order are $25 per unit, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) Increase by $23.500 Decrease by $23.500 Decrease by $123.500
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