Shady Inc. manufactures outdoor umbrellas. The company has the capacity to produce 100,000 units per year, but it currently produces and sells 75,000 units per year. The following information relates to current production: $44 Sale price per unit Variable costs per unit: Manufacturing Marketing and administrative Total fixed costs: Manufacturing Marketing and administrative $25 $9 OA. Increase by $5,000 B. Increase by $39,000 OC. Decrease by $5,000 OD. Increase by $44,600 $77,000 $25,000 If a special sales order is accepted for 4,400 umbrellas at a price of $39 per unit, and fixed costs increase by $17,000, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)

Shady Inc. manufactures outdoor umbrellas. The company has the capacity to produce 100,000 units per year, but it currently produces and sells 75,000 units per year. The following information relates to current production: $44 Sale price per unit Variable costs per unit: Manufacturing Marketing and administrative Total fixed costs: Manufacturing Marketing and administrative $25 $9 OA. Increase by $5,000 B. Increase by $39,000 OC. Decrease by $5,000 OD. Increase by $44,600 $77,000 $25,000 If a special sales order is accepted for 4,400 umbrellas at a price of $39 per unit, and fixed costs increase by $17,000, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 9E: Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs...

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