Lowwater Sailmakers manufactures sails for sailboats. The company has the capacity to produce 25,000 sails per year, but is currently producing and selling 20,000 sails per year. The following information relates to current production. If a special sales order is accepted for 4,000 sails at a price of $120 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) 中 Sale price per unit $150 Variable costs per unit: Manufacturing Marketing and administrative $60 $20 Total fixed costs: Manufacturing Marketing and administrative $600,000 $200,000 Increase by $170,000 O Increase by $150,000 O Increase by $160,000 O Increase by S140,000 O Increase by $180,000 )

Lowwater Sailmakers manufactures sails for sailboats. The company has the capacity to produce 25,000 sails per year, but is currently producing and selling 20,000 sails per year. The following information relates to current production. If a special sales order is accepted for 4,000 sails at a price of $120 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) 中 Sale price per unit $150 Variable costs per unit: Manufacturing Marketing and administrative $60 $20 Total fixed costs: Manufacturing Marketing and administrative $600,000 $200,000 Increase by $170,000 O Increase by $150,000 O Increase by $160,000 O Increase by S140,000 O Increase by $180,000 )

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 7EA: Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has...

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