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QUESTION 39 Voyage makes sails for sailboats. The firm has the capacity to produce 36,000 sails per year, but is currently producing and selling 25,000
QUESTION 39 Voyage makes sails for sailboats. The firm has the capacity to produce 36,000 sails per year, but is currently producing and selling 25,000 sails per year. The following information relates to current production: Sales price per unit $185 Variable costs per unit: Manufacturing $60 Selling and administrative Total fixed costs: Manufacturing Selling and administrative $700,000 $300,000 The firm has accepted a special order for 5,500 sails at a sales price of $160 per unit. This order would not affect fixed costs, but would incur variable selling and administrative costs. What is the change in operating income from accepting the special order? O A. Operating income decreases by $440,000 O B. Operating income increases by $880,000 O C. Operating income increases by $440,000 O D. Operating income decreases by $880,000
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