Question
Martin Incorporated provided the following information regarding its onlyproduct: Sale price per unit -- $50.00 Direct materials used -- $ 164,000 Direct labor incurred --
Martin Incorporated provided the following information regarding its onlyproduct:
Sale price per unit -- $50.00
Direct materials used -- $ 164,000
Direct labor incurred -- $186,000
Variable manufacturing overhead -- $122,000
Variable selling and administrative expenses -- $73,000
Fixed manufacturing overhead -- $65,000
Fixed selling and administrative expenses -- $12,000
Units produced and sold -- 20,000
Assume no beginning inventory
Assuming there is excesscapacity, what would be the effect on operating income of accepting a special order for 5,400 units at a sale price of $43 perproduct? (NOTE: Assume regular sales are not affected by the special order. Round any intermediary calculations to the nearestcent.)
A.
Increase by $85,050
B.
Increase by $379,350
C.
Increase by $232,200
D.
Decrease by $ 85,050
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