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The following information relates to current production of outdoor chaise lounges at Backyard Posh: The regular selling price per chaise lounge is $330. The company
The following information relates to current production of outdoor chaise lounges at Backyard Posh: The regular selling price per chaise lounge is $330. The company is analyzing the opportunity to accept a special sales order for 300 chaise lounges at a price of $210 per unit. Variable marketing and administrative costs would be $11 per unit lower than on regular sales. Fixed costs would increase by $14,000. The company has the capacity to produce 105,000 chaise lounges per year, but is currently producing and selling 11,000 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? Decrease by $11,500 Decrease by $25,500 Increase by $11,500 Increase by $25,500
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