Question
ve Final Bluebird Manufacturing has received a special one-time order for 17,000 bird feeders at $5.00 per unit. Bluebird currently produces and sells 75,000
ve Final Bluebird Manufacturing has received a special one-time order for 17,000 bird feeders at $5.00 per unit. Bluebird currently produces and sells 75,000 units at $9.00 each. This level represents 80% of its capacity. Production costs for these units are $5.50 per unit, which includes $4.25 of variable costs and $3.25 of fixed costs. If the special offer is accepted, there will be no incremental fixed cost. If Bluebird accepts this additional business, the effect on income will be: Multiple Choice $85,000 increase $12,750 increase $72.250 increase $8,500 decrease $72,250 decrease
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