Question
Martinez Manufacturing has an annual capacity of 80,500 units per year. Currently, the company is making and selling 78,600 units a year. The normal sales
Martinez Manufacturing has an annual capacity of 80,500 units per year. Currently, the company is making and selling 78,600 units a year. The normal sales price is $107 per unit, variable costs are $70 per unit, and total fixed expenses are $2,000,000. An out-of-state distributor has offered to buy 5,600 units at $75 per unit. Martinez's cost structure should not change as a result of this special order. By how much will Martinez's income change if the company accepts this order? Martinez net income will__(Increase/decrease)_ by_______ $ if it accepts the special order.
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