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Question Help Belfry Company makes special equipment used in cell towers. Each unit sells for $400. Belfry produces and sells 12,700 units per year. They
Question Help Belfry Company makes special equipment used in cell towers. Each unit sells for $400. Belfry produces and sells 12,700 units per year. They have provided the following income statement data: Traditional Format Contribution Margin Format Sales revenue $5,080,000 Sales revenue $5,080,000 Cost of goods sold 2,700,000 Variable costs: Gross profit 2,380,000 Manufacturing 800,000 Selling & admin. expenses 725,000 Selling & admin 500,000 Contribution margin 3,780,000 Fixed costs: Manufacturing 1,900,000 Selling & admin 225,000 Operating income $1,655,000 Operating income $1,655,000 A. Operating income will decrease by $15,811. B. Operating income will increase by $14,189. C. Operating income will decrease by $14,189. D. Operating income will increase by $24,000. Question Help Selling & admin. expenses 725,000 Selling & admin 500.000 Contribution margin 3.780,000 Fixed costs: Manufacturing 1.900.000 Selling & admin 225,000 Operating income $1,655,000 Operating income $1,655,000 A foreign company has offered to buy 80 units for a reduced sales price of $300 per unit. The marketing manager says the sale will not affect the company's regular sales. The sales manager says that this sale will require variable selling and administrative costs. The production manager reports that it would require an additional $30,000 of fixed manufacturing costs to accommodate the specifications of the buyer. If Belfry accepts the deal, how will this impact operating income? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) O A. Operating income will decrease by $15,811. OB. Operating income will increase by $14,189. OC. Operating income will decrease by $14,189. OD. Operating income will increase by $24,000
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