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Author Question: Clear Sky Sailmakers manufactures sails for sailboats. The company has the capacity to produce ... (Read 140 times)

sheilaspns

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Clear Sky Sailmakers manufactures sails for sailboats. The company has the capacity to produce 15,000 sails per year, but is currently producing and selling 10,000 sails per year. The following information relates to current production:

Sale price per unit$250
Variable costs per unit:
    Manufacturing$165
    Marketing and administrative$50
Total fixed costs:
    Manufacturing$750,000
    Marketing and administrative$200,000


If Clear Sky Sailmakers accepts a special order for 5,000 sails at a price of $225 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)
◦ Decrease by $50,000
◦ Increase by $150,000
◦ Increase by $50,000
◦ Increase by $1,125,000


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Marked as best answer by sheilaspns on Jan 4, 2020

Ksanderson1296

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sheilaspns

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Reply 2 on: Jan 4, 2020
YES! Correct, THANKS for helping me on my review


AmberC1996

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Reply 3 on: Yesterday
:D TYSM

 

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