Variable costs were 60% of cost of goods sold and 30% of operating expenses. A foreign company wants to purchase 1,500 units at a special unit price of $20. Acceptance of the order will result in an additional $1,500 shipping costs, but no increase in other fixed costs.

What is the total cost of accepting the special order? *

$27,000

$30,375

$31,875

None of the above

By what amount would the company's operating income be increased or decreased as a result of accepting the special order? *

$1,875 decrease

$1,875 increase

$30,000 increase

None of the above

XYZ Company reported the following while operating at 90% of its capacity: Sales (20,000 units) $800,000 Cost of Goods Sold 600,000 Gross Profit 200,000 Operating Expenses 150,000 Net Income 50,000