What would be the effect on operating income of accepting a special order for 5000 units at
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Question:
Samson Incorporated provided the following information regarding its only product:
Sale price per unit | $50.00 |
Direct materials used | $160,000 |
Direct labor incurred | $185,000 |
Variable manufacturing overhead | $120,000 |
Variable selling and administrative expenses | $70,000 |
Fixed manufacturing overhead | $65,000 |
Fixed selling and administrative expenses | $12,000 |
Units produced and sold | 20,000 |
Assume no beginning inventory |
Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 3,000 units at a sale price of $45 per produc assuming additional fixed manufacturing overhead costs of $5,000 is incurred?
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