Comfort Ride manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year. The following information relates to the current production of the product Sale price per unit Variable costs per unit: Manufacturing Marketing and administrative $410 OC. Increase by $148,000 OD. Increase by $2,590,000 $270 $60 Total fixed costs: Manufacturing Marketing and administrative $780,000 $210,000 If a special sales order is accepted for 7,400 seats at a price of $350 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: OA. Decrease by $148,000 OB. Increase by $2,000,000
Comfort Ride manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year. The following information relates to the current production of the product Sale price per unit Variable costs per unit: Manufacturing Marketing and administrative $410 OC. Increase by $148,000 OD. Increase by $2,590,000 $270 $60 Total fixed costs: Manufacturing Marketing and administrative $780,000 $210,000 If a special sales order is accepted for 7,400 seats at a price of $350 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: OA. Decrease by $148,000 OB. Increase by $2,000,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Comfort Ride manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per
year. The following information relates to the current production of the product
Sale price per unit
Variable costs per unit:
Manufacturing
Marketing and administrative
$410
OC. Increase by $148,000
OD. Increase by $2,590,000
$270
$60
Total fixed costs:
Manufacturing
Marketing and administrative
$780,000
$210,000
If a special sales order is accepted for 7,400 seats at a price of $350 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE:
OA. Decrease by $148,000
OB. Increase by $2,000,000
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