Figure 17-2 Wannabee Company manufactures a product with the following costs per unit at the expected production level of 84,000 units:
The company has the capacity to produce 90,000 units. The product regularly sells for $120.
Refer to Figure 17-2. A wholesaler has offered to pay $110 a unit for 7,500 units.
If the special order is accepted, the effect on operating income would be a
A) $249,000 increase.
B) $429,000 increase.
C) $495,000 increase.
D) $75,000 decrease.

Question

Figure 17-2 Wannabee Company manufactures a product with the following costs per unit at the expected production level of 84,000 units:
 The company has the capacity to produce 90,000 units. The product regularly sells for $120.
Refer to Figure 17-2. A wholesaler has offered to pay $110 a unit for 7,500 units.
If the special order is accepted, the effect on operating income would be a
A) $249,000 increase. 
B) $429,000 increase. 
C) $495,000 increase. 
D) $75,000 decrease.

Quizplus · Accepted Answer

The Answer of Figure 17-2 Wannabee Company manufactures a product with the following costs per unit at the expected production level of 84,000 units:
 The company has the capacity to produce 90,000 units. The product regularly sells for $120.
Refer to Figure 17-2. A wholesaler has offered to pay $110 a unit for 7,500 units.
If the special order is accepted, the effect on operating income would be a
A) $249,000 increase. 
B) $429,000 increase. 
C) $495,000 increase. 
D) $75,000 decrease.

Figure 17-2 Wannabee Company Manufactures a Product with the Following