# Question: Visionary Game Company sells 600 000 units per year of a

Visionary Game Company sells 600,000 units per year of a particular video game cartridge at \$12 each. The current unit cost of the game is broken down as follows:
Direct materials . . . . . . . . . . . . . . . . . . . . . . . \$3.00
Direct labor . . . . . . . . . . . . . . . . . . . . . . . .. 1.00
Variable factory overhead . . . . . . . . . . . . . .. 3.50
Fixed factory overhead . . . . . . . . . . . . . . . ... 1.50
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... \$9.00
At the beginning of the current year, Visionary received a special order for 10,000 of these game cartridges per month, for one year only, at a sales price of \$8 per unit. To fill the order, Visionary will have to rent additional assembly space at a cost of \$12,000 (\$1,000 per month). Compute the estimated increase or decrease in annual operating income that will result from accepting this special order.

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• CreatedApril 17, 2014
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