Time Remaining: 02-37:21 Submit Quiz This Question: 1 pt 6 of 10 (3 complete) Th

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Time Remaining: 02-37:21 Submit Quiz This Question: 1 pt 6 of 10 (3 complete) This Quiz: 10 pts possible Variable manufacturing costs per unit Total fixed manufacturing costs Variable marketing and administrative costs per unit Total fixed marketing and administrative costs $106 $525,000 $250,000 The regular selling price per chaise lounge is $350. The company is analyzing the opportunity to accept a special sales order for 700 chaise lounges at a price of $220 per unit. Variable marketing and administrative costs would be $15 per unit lower than on regular sales. Fixed ccwould increase by $10,000. The company has the capacity to produce 35,000 chaise lounges per year, but is currently producing and selling 13,000 chaise lounges per year. Regular sales will not be affected by the special order f the company were tocthis special order how would operating income be affecc? O A. Increase by $55,800 B. Decrease by S6580 O C. Increase by $65,800 O D. Decrease by $55,800 Click to select your answer. Accounting Chegg tutors

Explanation / Answer

Per unit Total 700 Incremental revenue 220 154000 Incremental costs: Variable costs: Variable manufacturing costs per unit 106 74200 Variable marketing and administrative expense 20 14000 Total variable cost 126 88200 Fixed costs: Fixed costs increase 10000 Total Incremental costs 98200 Incremental net operating income(loss) 55800 Option A is correct

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