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Far East Sailmakers manufactures sails for sailboats. The company has the capacity to produce 1 2 , 0 0 0 sails per year but is
Far East Sailmakers manufactures sails for sailboats. The company has the capacity to produce sails per year but is currently producing and selling sails per year. The following information relates to current production:
Sale price per unit
$
Variable costs per unit:
Manufacturing
$
Marketing and administrative
$
Total fixed costs:
Manufacturing
$
Marketing and administrative
$
If Far East accepts a special order for sails at a price of $ per unit, fixed costs increase by $ and variable marketing and administrative costs for that order are $ per unit, how would operating income be affected? NOTE: Assume regular sales are not affected by the special order.
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