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Question 5 (0.71 points) Saved Sky High Seats manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently
Question 5 (0.71 points) Saved Sky High Seats manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year. The following information relates to current production of seats: Sale price per unit $420 Variable costs per unit: Manufacturing $260 Marketing and administrative $40 Total fixed costs: Manufacturing $770,000 Marketing and administrative $200,000 If a special sales order is accepted for 4,000 seats at a price of $375 per unit, fixed costs remain unchanged, and no variable marketing and administrative costs will be incurred for this order, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) Question 5 options: Increase by $2,540,000 Increase by $460,000 Increase by $300,000 Decrease by $460,000
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