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Miami Company manufactures outdoor fireplaces. For the first 9 months of 2021, the company has reported the following operating results, while it was operating
Miami Company manufactures outdoor fireplaces. For the first 9 months of 2021, the company has reported the following operating results, while it was operating at 96% of plant capacity. The cost of goods sold was 80% variable and 20% fixed; operating expenses were 70% variable and 30% fixed. In October 2021, Miami Company received a special order for 10,000 fireplaces at $60 each from Bina Company. Accepting this order would result in an additional $25,000 of shipping costs, but it would have no effect on fixed operating expenses. Sales (300,000 units) Cost of Goods Sold Gross Profit Operating Expenses Net Operating Income $27,000,000 20,250,000 6,750,000 3,000,000 $3,750,000 15. If Miami Company accepted the special order from Bina Company, what would be the impact of accepting this order on the company's overall net operating income?* The overall net operating income would increase by $35,000 The overall net operating income would decrease by $35,000 The overall net operating income would increase by $200,000 The overall net operating income would decrease by $200,000 None of the above
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