Neck Company manufactures ties. When 28,000 items are produced, the costs per unit are: ADirect materials...

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Neck Company manufactures ties. When 28,000 items are produced, the costs per unit are: ADirect materials ADirect manufacturing labor XVariable manufacturing overhead Fixed manufacturing overhead AVariable selling Fixed selling Total $0.60 3.00 1.20 1.60 0.80 1.13 $8.30 The ties normally sell for $22 each. Neck Company has received a special order for 2,000 ties at $10.00 per tie. Neck Company has excess capacity. Required: Compute the amount by which the operating income would change if the order were accepted. Neck Company manufactures ties. When 28,000 items are produced, the costs per unit are: ADirect materials ADirect manufacturing labor XVariable manufacturing overhead Fixed manufacturing overhead AVariable selling Fixed selling Total $0.60 3.00 1.20 1.60 0.80 1.13 $8.30 The ties normally sell for $22 each. Neck Company has received a special order for 2,000 ties at $10.00 per tie. Neck Company has excess capacity. Required: Compute the amount by which the operating income would change if the order were accepted.

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