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Fruit Computer Company makes special fruit themed computers. Each unit sells for $400. Fruit Computer Company produces and sells 12,600 units per year. They have

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Fruit Computer Company makes special fruit themed computers. Each unit sells for $400. Fruit Computer Company produces and sells 12,600 units per year. They have provided the following income statement data: $5,040,000 Traditional Format Revenue Cost of goods sold Gross profit Selling & admin. expenses Contribution Format $5,040,000 Revenue 2.800,000 Variable costs: 2,240,000 Manufacturing 800.000 500.000 3,740,000 725.00g Selling & admin. Contribution margin Fixed costs: Manufacturing Selling & admin $1,515,000 Operating income 2,000,000 225.000 $1.515.000 Operating income A foreign company has offered to buy 80 units for a reduced sales price of $350 per unit. The marketing manager says the sale will not affect the company's regular sales. The sales manager says that this sale will require variable selling and administrative costs. The production manager reports that it would require an additional $25,000 of fixed manufacturing costs to accommodate the specifications of the buyer. If Fruit Computer Company accepts the deal, how will this impact operating income? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) Operating income will increase by $28,000, Operating income will decrease by $5254, o Operating income will decrease by $19,746. Operating income will increase by $5254 Fruit Basket Company manufactures fruit baskets. The basket component, not including the fruit, is made in-house. Details of the baskets are as follows: units per Volume 800 month Variable cost per unit $7 per unit Fixed costs $15,000 per month A foreign factory has offered to supply Fruit Basket Company with ready-made baskets for a price of $14 per basket. Assume that Fruit Basket Company's fixed costs are unavoidable, but that Fruit Basket Company could use the vacated production facilities to earn an additional $8500 of profit per month. If Fruit Basket Company decides to outsource, monthly operating income will increase by O $8500 $25,300 O $15,000 O $2900

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