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Ease Products manufactures t-shirts. It has the following costs when its production level is 75,000 units (t-shirts): (Click the icon to view the costs.) (Click
Ease Products manufactures t-shirts. It has the following costs when its production level is 75,000 units (t-shirts): (Click the icon to view the costs.) (Click the icon to view additional information.) What will happen to Ease's operating income if it accepts this special order? Complete the following incremental analysis to determine the impact on Ease's operating income if it accepts this special order. (Round all per unit amounts to the nearest cent. $X.XX, and all other amounts to the nearest whole dollar. Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin and/or operating income from the special order.) Total Order (7,500 units) Per Unit Data table Incremental Analysis of Special Sales Order Decision Revenue from special order Less variable expense associated with the order: Direct materials Direct labor Total costs for 75,000 units Direct materials $ 232,500 Variable manufacturing overhead Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing costs 33,750 45,000 110,000 $ 421,250 - X - X More info Print Done The company's relevant range extends to 87,500 units. Ease has received a special order for 7,500 t-shirts at a special price of $48,750 for the entire order. The special order t-shirt would use a fabric that is less expensive than the standard fabric used by Ease, which would allow Ease to save $0.25 per t-shirt in direct materials when manufacturing this special order. Ease has the excess capacity to manufacture this special order. Its total fixed costs will not be impacted by the special order. Help me solve this Video Clear all Check
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