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It costs Garrison Company $12.70 of variable and $8.40 of fixed costs to produce one bathroom scale which normally sells for $22.90. A foreign wholesaler
It costs Garrison Company $12.70 of variable and $8.40 of fixed costs to produce one bathroom scale which normally sells for $22.90. A foreign wholesaler offers to purchase 1,800 scales at $9.80 each. Garrison will incur special shipping costs of $2.50 per scale if the order is accepted. Garrison has sufficient unused capacity to accommodate the order. If the special order is accepted, what will be the effect on net income? Increase of $13,140 Decrease of $9,720 Decrease of $13,140 Increase of $9,720
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