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Cathy Company has just obtained a request for a special order of 8.000 jigs to be shipped at the eris of the month at a
Cathy Company has just obtained a request for a special order of 8.000 jigs to be shipped at the eris of the month at a selling price of $9 each. The company has a production capacity of 90.000 jigs per? month. At present, the-company is producing and selling 84.000 ligs per month through regularchannels at a selling price of $12 each. For these regular sales, the cost for one fig is: Variable production costs $4.60 Fixed production costs 1.70 Variableselling expenses 1.40 Variable production costs and variable selling costs will remain the same on the special-order units. There will be no change to total fixed production costs. If Cathy chooses to accept the special order. annual net operating income will increase by: $24 , 000 $18 , 000 $10 , 400 $12 , 000 $6 , 000
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