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Question 4 Company X produces widgets. The following information relates to the its current production: Sale price per unit: Variable costs per unit Manufacturing
Question 4 Company X produces widgets. The following information relates to the its current production: Sale price per unit: Variable costs per unit Manufacturing Marketing and administrative Total fixed costs: Manufacturing Marketing and administrative $400 $240 $70 $760,000 $230,000 A special sales order request was received for 7400 widgets at a price of $350 per widget. Assuming fixed costs remain unchanged, how would operating income be affected if the special order is accepted? (NOTE: Assume the company has capacity and that regular sales are not affected by the special order.) A. Increase by $2,590,000 B. Increase by $296,000 C. Decrease by $296,000 D. Increase by $4,590,000
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