Question
The following information relates to current production of outdoor chaise lounges at Backyard Posh: Variable manufacturing costs per unit Total fixed manufacturing costs Variable marketing
The following information relates to current production of outdoor chaise lounges at Backyard Posh: Variable manufacturing costs per unit Total fixed manufacturing costs Variable marketing and administrative costs per unit Total fixed marketing and administrative costs $ 102.00 $525,000 $ 30.00 $250,000 The regular selling price per chaise lounge is $300.00. The company is analyzing the opportunity to accept a special sales order for 800 chaise lounge at a price of $250.00 per unit. Fixed costs would remain unchanged. The company has the capacity to produce 15,000 chaise lounges per year, but is currently producing and salling 10,000 chaise lounges per year. Regular sales will not be affected by the special order. If the company were to accept this special order, how would operating income be affected? OA Increase by 504,400 B. Increase by $118,400 OC. Decrease by $118,400 OD. Decrease by 594,400
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