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Ellis Television makes and sells portable televisions. Each television regularly sells for $250. The following cost data per television are based on full capacity of
Ellis Television makes and sells portable televisions. Each television regularly sells for $250. The following cost data per television are based on full capacity of 10,000 televisions produced and sold each period. Direct materials.. Direct labor. Factory overhead (70% variable).....$40 Selling expenses (60%variable)... S25 $80 S60 A customer in Scotland has offered Ellis $200 each for 2,000 televisions. The only selling costs that would be incurred on this special order would be $6 per television for shipping. Ellis currently is selling 9,000 televisions through regular channels each period; acceptance of the order thus would require giving up 1,000 units of regular sales. What effect would acceptance ofthe special order have on Ellis Television's operating income? $7,000 increase $52,000 increase s11,000 decrease s15,000 decrease A. . C. D
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