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Shady Inc. manufactures outdoor umbrellas. The company has the capacity to produce 100,000 units per year, but it currently produces and sells 75,000 units per
Shady Inc. manufactures outdoor umbrellas. The company has the capacity to produce 100,000 units per year, but it currently produces and sells 75,000 units per year. The following information relates to current production: Sales price per unit $44 Variable costs per unit: Manufacturing $23 Marketing and administrative $7 Total fixed costs: Manufacturing $79,000 Marketing and administrative $24,000 If a special sales order is accepted for 6,900 umbrellas at a price of $40 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order) O A. Increase by $276,000 OB. Decrease by $69,000 Oc. Increase by $69.000 D. Increase by $2,400,000
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