question 13

Question 13 (3 points) Loki, Inc. manufactures glowing lamps. The company has the capacity to produce 36,000 lamps per year and is currently producing and selling 25,000 lamps per year. The following information relates to current production: $60 Sales price per unit $175 Variable costs per unit: Manufacturing Selling and administrative $10 Total fixed costs: Manufacturing $675,000 Selling and administrative $250,000 If a special pricing order is accepted for 5500 lamps at a sales price of $170 per unit, fixed costs remain unchanged, and there are no variable selling and administrative costs for this order, what is the change in operating income? Operating income decreases by $550,000. Operating income increases by $550,000. Operating income decreases by $605,000. 0 Operating income increases by $605,000