Wisconsin Company has a current production capacity level of 200,000 units per month. At this level of
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Question:
Wisconsin Company has a current production capacity level of 200,000 units per month. At this level of production, variable costs are $1.00 per unit and fixed costs are $0.50 per unit. Current monthly sales are 164,500 units. Gates Company has contacted Wisconsin Company about purchasing 20,000 units at $2.50 each. Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order. Variable costs would increase $0.30 per unit with the special order. If the order is accepted, what is Wisconsin Company's increase in operating income?
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