CoGuard manufactures motors for sailboats. The company has the capacity to produce 15,000 motors per year,...

 

Transcribed Image Text:

CoGuard manufactures motors for sailboats. The company has the capacity to produce 15,000 motors per year, but is currently producing and selling 13,000 motors per year. The following information relates to current production: Sale price per unit Variable costs per unit: Manufacturing Marketing and administrative Total fixed costs: Manufacturing Marketing and administrative $250 $165 $50 $750,000 $200,000 CoGuard accepts a special sales order for 5,000 motors at a price of $240 per unit. In order to do so, it decides to cut sales to regular clients. As a result of this decision, how would operating income be affected? CoGuard manufactures motors for sailboats. The company has the capacity to produce 15,000 motors per year, but is currently producing and selling 13,000 motors per year. The following information relates to current production: Sale price per unit Variable costs per unit: Manufacturing Marketing and administrative Total fixed costs: Manufacturing Marketing and administrative $250 $165 $50 $750,000 $200,000 CoGuard accepts a special sales order for 5,000 motors at a price of $240 per unit. In order to do so, it decides to cut sales to regular clients. As a result of this decision, how would operating income be affected?

Answer rating: 100% (QA)

To answer how CoGuards operating income will be affected by accepting a special sales order for 5000 motors at a price of 240 per unit we need to calc... View the full answer