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Sky High Seats manufactures seats for airplanes. The company has the capacity to produce 100,000 sea

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Sky High Seats manufactures seats for airplanes. The company has the capacity to produce 100,000 sea

Sky High Seats 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 current production of seats:

Sale price per unit   $400

Variable costs per unit:
Manufacturing   $220
Marketing and administrative   $50

Total fixed costs:
Manufacturing   $750,000
Marketing and administrative   $200,000

If a special sales order is accepted for 4,000 seats at a price of $325 per unit, fixed costs remain unchanged, and no variable marketing and administrative costs will be incurred for this order, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)
A) Increase by $420,000
B) Increase by $220,000
C) Increase by $2,180,000
D) Decrease by $420,000

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Managerial Accounting

Edition: 4^th

Author: Braun

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bernie2981 Author

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8 years ago

this is exactly what I needed

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I appreciate what you did here, answered it right Smiling Face with Open Mouth

nsak

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This helped my grade so much Perfect

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