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Eric Inc. has a chance to sell Leafs T-shirts to a new fan who wants to give them away. The customer has offered a price

Eric Inc. has a chance to sell Leafs T-shirts to a new fan who wants to give them away. The customer has offered a price of $10.00 for each T-shirt and wants 3,000 T-shirts in total. The normal selling price is $18.00 each. Eric Inc. has enough capacity to fill the order.

Unit information for the company's normal level of production is as follows:

Direct materials $3.00
Direct labour $2.00
Variable overhead $4.50
Fixed overhead $2.50
Total $12.00

Fixed overhead will not be effected by this special order.

Using the above information answer the following questions.

Should Eric Inc. accept or reject the special order?

Enter the letter A for accept.

Enter the letter B for reject.

Would operating income increase or decrease if the special order was accepted.

Enter the letter A for increase.

Enter the letter B for decrease.

By how much will operating income increase or decrease by if the order was accepted?

Enter your answer as a positive number even if operating income would decrease.

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