Maritime Sail Makers manufactures sails for sailboats. The company has the capacity to produce 37 comma 000 sails per year and i
s currently producing and selling 30 comma 000 sails per year. The following information relates to current production: Sales price per unit $ 175 Variable costs per unit: Manufacturing $ 60 Selling and administrative $ 10 Total fixed costs: Manufacturing $ 675 comma 000 Selling and administrative $ 250 comma 000 If a special pricing order is accepted for 5 comma 500 sails at a sales price of $ 160 per unit, fixed costs remain unchanged, and there are no variable selling and administrative costs for this order, what is the change in operating income?
If a special pricing order is accepted for 5,500 sails at a sales price of $ 160 per unit
Because there is no change in the fixed costs and there are no variable selling and administrative costs, the effect on income will be equal to the change in total contribution margin.
Total contribution margin= number of units* (selling price - unitary variable cost
Total contribution margin change= 5,500* (160 - 60)= $550,000
We will record assets and expenses on the debit as they increase during the year and will record liabilities and capital on the credit side as they increase during the year or vice versa.
January 1 (Cash fund being recorded in petty cash)
The kind of startup that her store is considered to be is a new market idea. New market ideas are techniques or ideas that are employed or thought of as a way of strategizing and a way of improving one's business or store. In which Consuela engages to as she decided to have a new idea for a way of improving her store and for the sake of her customers.