Below is the cost of Idler Company of one of its products a sport fighting kite....

 

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Below is the cost of Idler Company of one of its products a sport fighting kite. Variable production costs.. $5.00 Fixed production costs... 2.35 Variable selling costs.. 1.00 Fixed selling and administrative costs.. 3.45 Total unit cost. $11.80 There is ample idle capacity to accept a special order without any increase in total fixed costs of any kind. A 1,000 kites special order was received from local customer at a price of $9.00 each. The special order would involve lower variable selling costs of $0.20 per unit instead of $0.75 per unit. What effect would accepting the special order have on the company's operating income? Select one: O a. $3,800 increase O b. $4,500 increase O c. $2,800 decrease O d. $3,950 increase Companies often have opportunity to sell products under special circumstances that don't affect their regular sales. Under such circumstances the special order should be accepted if. Select one: O a. Fixed selling and administrative costs will not be affected. O b. Manufacturing cost of the special order is lower than the manufacturing costs of company's regular sales. O c. Incremental revenue exceeds its incremental cost. O d. Selling price is higher than the company's regular selling price. Below is the cost of Idler Company of one of its products a sport fighting kite. Variable production costs.. $5.00 Fixed production costs... 2.35 Variable selling costs.. 1.00 Fixed selling and administrative costs.. 3.45 Total unit cost. $11.80 There is ample idle capacity to accept a special order without any increase in total fixed costs of any kind. A 1,000 kites special order was received from local customer at a price of $9.00 each. The special order would involve lower variable selling costs of $0.20 per unit instead of $0.75 per unit. What effect would accepting the special order have on the company's operating income? Select one: O a. $3,800 increase O b. $4,500 increase O c. $2,800 decrease O d. $3,950 increase Companies often have opportunity to sell products under special circumstances that don't affect their regular sales. Under such circumstances the special order should be accepted if. Select one: O a. Fixed selling and administrative costs will not be affected. O b. Manufacturing cost of the special order is lower than the manufacturing costs of company's regular sales. O c. Incremental revenue exceeds its incremental cost. O d. Selling price is higher than the company's regular selling price.

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