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Flynn Distilleries manufactures glass bottles. The company has the capacity to produce 25,000 bottles per year, but is currently producing and selling only 20,000 bottles
Flynn Distilleries manufactures glass bottles. The company has the capacity to produce 25,000 bottles per year, but is currently producing and selling only 20,000 bottles per year. The following information relates to current production: Sales price per unit $150 Variable costs per unit: Manufacturing $ 55 Marketing and Administrative $ 25 Total Fixed costs: Manufacturing $640,000 Marketing and Administrative $280,000 a) If a special sales order is accepted for 5,000 sales at a price of $125 per unit, and fixed costs remain unchanged, how would operating income change? (Show your work) b) If a special sales order is accepted for 3,000 sales at a price of $75 per unit, and fixed costs remain unchanged, and there are no additional variable marketing and administrative costs for this order, how would operating income change? (Show your work) c) If a special sales order is accepted for 2,000 sales at a price of $95 per unit, and fixed costs increase by $10,000, how would operating income change? (Show your work) d) If a special sales order is accepted for 2,500 sales at a price of $70 per unit, and fixed costs increase by $10,000, and variable marketing and administrative costs for that order decrease by $5 per unit, how would operating income change? (Show your work)
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