Question
Sunland Companymanufactures a product with a unit variable cost of $100and a unit sales price of $186. Fixed manufacturing costs were $480000when10000units were produced and
Sunland Companymanufactures a product with a unit variable cost of $100and a unit sales price of $186. Fixed manufacturing costs were $480000when10000units were produced and sold. The company has a one-time opportunity to sell an additional1000units at $120each in a foreign market which would not affect its present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows:
Income would decrease by $28000.
Income would increase by $20000.
Income would increase by $28000?
Income would increase by $120000.
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