Question: Ellington, Inc., which has excess capacity, received a special order for 4,100 units at a price of $16 per unit. Currently, production and sales are
Ellington, Inc., which has excess capacity, received a special order for 4,100 units at a price of $16 per unit. Currently, production and sales are anticipated to be 11,000 units without considering the special order. Budget information for the current year follows.
| Sales | $ | 209,000 | ||
| Less: Cost of goods sold | 154,000 | |||
| Gross margin | $ | 55,000 | ||
Cost of goods sold includes $22,000 of fixed manufacturing cost. If the special order is accepted, the company's income will:
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