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Sale price per unit Direct materials used Direct labor incurred Variable manufacturing overhead Variable selling and administrative expenses Fixed manufacturing overhead Fixed selling and administrative
Sale price per unit Direct materials used Direct labor incurred Variable manufacturing overhead Variable selling and administrative expenses Fixed manufacturing overhead Fixed selling and administrative expenses Units produced and sold $50.00 $16,400 $187,000 $123,000 $71,000 $65,000 $12,000 24,000 Assume no beginning inventory Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 3,400 units at a sale price of $42 per product assuming additional fixed manufacturing overhead costs of $5,000 is incurred? (NOTE: Assume regular sales are not affected by the special order. Round any intermediary calculations to the nearest cent.) A. Increase by $142,800 B. Decrease by $81,496 C. Increase by $86,496 D. Increase by $81,496
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