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Highlighter Stationary manufactures a product with the following costs per unit at the expected production level of 50,000 units: Direct materials R2 Direct labour

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Highlighter Stationary manufactures a product with the following costs per unit at the expected production level of 50,000 units: Direct materials R2 Direct labour R4 Variable manufacturing overhead R1 Fixed manufacturing overhead R5 The company has the capacity to produce 56,000 units. The product regularly sells for R20. A stationary wholesaler has offered to pay R10 a unit for 7,500 units. If the special order is accepted, the effect on operating income would be a: R75 000 increase R16 000 decrease R36 000 decrease R19 000 increase

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