Question: Your Corporation has received a request for a special order of 6,000 units of its product for $16 each. The product unit cost is as
Your Corporation has received a request for a special order of 6,000 units of its product for $16 each. The product unit cost is as follows: Direct materials......... $6.10 Direct labor..... 4.20 Variable manufacturing overhead........... 2.30 Fixed manufacturing overhead...... 3.60 Variable selling expense 1.80 Fixed selling expense... 1.20 $19.20 Total cost per unit The special order would have no effect on the company's total fixed manufacturing overhead costs. If the special order is accepted, variable selling costs would decrease by 40%. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, what is the impact on the company's overall net operating income? OA. $16,020 OB. $ 9,600 Oc. $20,400 OD. $13,920
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