Question
Southern Company manufactures custom paints and sells to Home Depo, Lowes and others. Their current capacity is 80,000 units per year and they are currently
Southern Company manufactures custom paints and sells to Home Depo, Lowes and others. Their current capacity is 80,000 units per year and they are currently producing 60,000 units (gallon cans of paint). The variable cost per unit is $35 and fixed cost are $300,000 per year. Their normal selling price is $80 per unit. Ace Hardware has submitted a special order to Southern for a one time purchase of 10,000 units for at a price of $55 per unit. If Southern accepts this special order what would be the impact on their Operating Income (OI)? You should not use any dollar ($) signs when providing your answer but use commas where appropriate.
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