Question
I need help on solving this question too. Thanks Pluto Incorporated provided the following information regarding its single product: Direct materials used $240,000 Direct labor
I need help on solving this question too. Thanks
Pluto Incorporated provided the following information regarding its single product:
Direct materials used | $240,000 |
Direct labor incurred | $420,000 |
Variable manufacturing overhead | $160,000 |
Fixed manufacturing overhead | $100,000 |
Variable selling and administrative expenses | $60,000 |
Fixed selling and administrative expenses | $20,000 |
The regular selling price for the product is $80. The annual quantity of units produced and sold is 40,000 units (the costs above relate to the 40,000 units production level). The company has excess capacity and regular sales will not be affected by this special order. There was no beginning inventory. What would be the effect on operating income of accepting a special order for 3,500 units at a sale price of $55 per product?
A. Increase by $115,500 | |
B. Increase by $269,500 | |
C. Decrease by $115,500 | |
D. Decrease by $269,500 |
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