If a special sales order is accepted for 3,000 seats at a price of $330 per unit, and fixed costs increase by $13,000, how w

Question

3 years ago

9

If a special sales order is accepted for 3,000 seats at a price of $330 per unit, and fixed costs increase by $13,000, how w

ould operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) A. Increase by $227,000 B. Increase by $77,000 C. Increase by $90,000 D. Decrease by $77,000

Business

1 answer:

densk [106] · Answer 1 · 2022-03-01T17:38:48+03:00

Answer:

B) Increase by $77,000

Explanation:

variable costs per unit:

manufacturing $250

mktg. and adm. $50

total $300

contribution margin per unit = sales price - total variable costs = $330 - $300 = $30

if the special is accepted, operating income will increase by = ($30 contribution margin per seat x 3,000 seats) - $13,000 increase in fixed costs = $90,000 - $13,000 = $77,000

If a special sales order is accepted for​ 3,000 seats at a price of​ $330 per​ unit, and fixed costs increase by​ $13,000, how w

If a special sales order is accepted for 3,000 seats at a price of $330 per unit, and fixed costs increase by $13,000, how w