Question: Bluebird Manufacturing has received a special one-time order for 16,400 bird feeders at $4.40 per unit. Bluebird currently produces and sells 75,000 units at $8.40
Bluebird Manufacturing has received a special one-time order for 16,400 bird feeders at $4.40 per unit. Bluebird currently produces and sells 75,000 units at $8.40 each. This level represents 80% of its capacity. Production costs for these units are $4.90 per unit, which includes $3.65 of variable costs and $2.65 of fixed costs. If the special offer is accepted, there will be no incremental fixed cost. If Bluebird accepts this additional business, the effect on income will be:
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