Answer:
$12,500 increase
Explanation:
The computation of the company income increased or decreased in the case of the special order accepted is shown below:
But before that we need to determine the variable cost of goods sold which is
The Variable cost of goods sold for 10,000 units is
= Total cost of goods sold - Fixed manufacturing cost
= $155,000 - $30,000
= $125,000
Now
Variable cost of goods sold for 5,000 units is
= $125,000 × 1 ÷ 2
= $62,500
And,
Special order size = 5,000 units
Selling price per unit in the special order = $15
So, the company income increased or decreased is
Sales (5,000 units × $15) $75,000
Less Variable cost of goods sold -$62,500
Net income $12,500
Therefore the net income is increased by $12,500 and in this, the fixed cost is not relevant so we do not considered it
