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QUESTION 26 The following information relates to current production of outdoor wicker sofas at Backyard Posh: Variable manufacturing costs per unit Total fixed manufacturing
QUESTION 26 The following information relates to current production of outdoor wicker sofas at Backyard Posh: Variable manufacturing costs per unit Total fixed manufacturing costs Variable marketing and administrative costs per unit Total fixed marketing and administrative costs $106 $525,000 $35 $250,000 The regular selling price per wicker sofa is $320. The company is analyzing the opportunity to accept a special sales order for 300 wicker sofas at a price of $230 per unit. Variable marketing and administrative costs would be $13 per unit lower than on regular sales. Fixed costs would increase by $11,000. The company has the capacity to produce 65,000 wicker sofas per year, but is currently producing and selling 8000 wicker sofas per year. Regular sales will not be affected by the special order. If the company were to accept this special order, how would operating income be affected? Increase by $19,600 Decrease by $30,600 Decrease by $19,600 Increase by $30,600 0.
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