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Minor Electric has received a special one-time order for 2,000 light fixtures at $5 per unit. Production costs for these units are $5.50 per
Minor Electric has received a special one-time order for 2,000 light fixtures at $5 per unit. Production costs for these units are $5.50 per unit, which includes $4.00 variable cost and $1.50 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $1,000 with a zero salvage value. Management expects no other changes in costs as a result of the additional production. Should the company accept the special order? No, because net income would decrease by $1,500. Yes, because net income would increase by $10,000. Yes, because net income would increase by $1,000. Yes, because net income would decrease by $2,000.
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