Question
Green Lawn Company is considering a special order for 1,000 new sprinkler systems from a new customer, a foreign distributor. The foreign distributor is offering
Green Lawn Company is considering a special order for 1,000 new sprinkler systems from a new customer, a foreign distributor. The foreign distributor is offering to purchase the sprinkler systems for $1,200 each from Green Lawn Company. Green Lawn Company currently sells them for $2,000. Green Law Company has excess capacity. It costs Green Lawn Company $1,000 in variable costs and $500 in fixed costs for each unit. They will not incur any additional fixed costs due to this order. If Green Lawn Company accepts this order, Net Income will be affected by how much?
Increase by $200,000 Increase by $300,000 Decrease by $200,000 Decrease by $300,000
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