Structuring a Special-Order Problem Recently Wang Company was been approached by a new customer with an offer to purchase 10,000 units of its model 134 price of $4.55 each. The new customer is geographically separated from the company's other customers, and existing sales would not be affected. Normally Wang Company produces 75,000 units of 134 per year but only plans to produce and sell 60,000 in the coming year. The normal sales price is $12 per unit. Unit cost information for the normal level of activity is as follows: Direct materials $1.75 Direct labour 2.50 Variable overhead 1.50 Fixed overhead 3.25 Total $9.00 Fixed overhead will not be affected by whether or not the special Required: 1. What are the relevant costs and benefits of the two alternatives? The input in the box below will not be graded, but may be reviewed Are relevant costs or benefits are attached to rejecting the order? order 2. By how much will operating income increase or decrease if by s Previous Next >