Question
Outdoor Co. is considering a special order for 30 handcrafted tables, and each table is $170. The normal selling price of a table is
Outdoor Co. is considering a special order for 30 handcrafted tables, and each table is $170. The normal selling price of a table is $190 and its unit product cost as shown below: Direct materials $84 Direct labor $45 Manufacturing overhead $30 Unit product cost $159 However, $4 of the overhead is variable with respect to the number of tables. This special order would require special paint cost costing $2 per table and would require acquisition of a special tool costing $200 that would have no other use once the special order is done. What effect would be accepting this order have on the company's net operating income? Net income will increase $850 Net income will increase $330 Net income will decrease $850 Net income will decrease $380
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