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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. A Would operating income increase or decrease if the special order was accepted. Enter the letter A for increase. Enter the letter B for decrease. A 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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