BOBA Company budgeted sales of 400,000 calculators at P40 per unit last year. Variable manufacturing costs were
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Question:
BOBA Company budgeted sales of 400,000 calculators at P40 per unit last year. Variable manufacturing costs were budgeted at P16 per unit, and fixed manufacturing costs at P10 per unit. A special order for 40,000 calculators at P23 each was received by BOBA in March. BOBA has sufficient plant capacity to manufacture the additional quantity without incurring any additional fixed manufacturing costs. Acceptance of the special order would not affect BOBA's normal sales and no selling expenses would be incurred. What would be the effect on net operating income if the special order were incur accepted?
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