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Garston Company produces a single model wind turbine and has an annual plant capacity of 3 , 0 0 0 units. Data concerning this product
Garston Company produces a single model wind turbine and has an annual plant capacity of units. Data concerning this product are given below:
Annual sales at regular selling prices units
Manufacturing costs:
Variable manufacturing cost per unit $
Fixed annual $
Selling and administrative expenses:
Variable sales commissions $
Fixed annual $
The company has received a special order for units at a selling price of $ each. The regular sales price is $ The sales commissions on the units would be reduced by onethird. This special order would have no impact on total fixed costs.
What effect would accepting the special order have on the company's net operating income?
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