Question
Lowwater Sailmakers manufactures sails for sailboats. The company has the capacity to produce 25,000 sails per year, and is currently producing and selling 20,000 sails
Lowwater Sailmakers manufactures sails for sailboats. The company has the capacity to produce 25,000 sails per year, and is currently producing and selling 20,000 sails per year. The following information relates to current production:
Sale price per unit $150
Variable costs per unit
Manufacturing $55
Marketing and admin $25
Total Fixed costs
Manufacturing $640,000
Marketing and admin $280,000 If a special sales order is accepted for 5,000 sails at a price of $125 per unit, and fixed costs remain unchanged, what is the change in operating income?
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