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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
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 the current production of the product: Sale price per unit $450 Variable costs per unit: Manufacturing Marketing and administrative $230 $50 Total fixed costs: Manufacturing $780,000 Marketing and administrative $200,000 If a special sales order is accepted for 7,300 seats at a price of S390 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 $803,000 OB. Increase by $11,000,000 O C. Decrease by 5803,000 OD. Increase by $2,847,000
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