Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Widget Inc. manufactures widgets. The company has the capacity to produce 100,000 widgets per year, but it currently produces and sells 75,000 widgets per year.

Widget Inc. manufactures widgets. The company has the capacity to produce 100,000 widgets per year, but it currently produces and sells 75,000 widgets per year. The following information relates to current production:

Sale price per unit

$45

Variable costs per unit:

Manufacturing

$22

Marketing and administrative

$8

Total fixed costs:

Manufacturing

$76,000

Marketing and administrative

$21,000

If a special sales order is accepted for 4,700 widgets at a price of $35 per unit, and fixed costs increase by $16,000, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Financial Accounting Acc 201 College Of Southern Nevada

Authors: Weygandt. Kimmel. Kieso

13th Edition

1118742966, 978-1118742969

More Books

Students also viewed these Accounting questions