Gundy Company manufactures a product with the following costs per unit at the expected production of 30,000 units: The company has the capacity to produce 30,000 units.The product regularly sells for $40.A wholesaler has offered to pay $32 per unit for 2,000 units.
If the firm chooses to accept the special order and reject some regular sales,the effect on operating income would be
A)a $20,000 increase.
B)a $16,000 decrease.
C)a $4,000 increase.
D)$-0-.

Question

Gundy Company manufactures a product with the following costs per unit at the expected production of 30,000 units:  The company has the capacity to produce 30,000 units.The product regularly sells for $40.A wholesaler has offered to pay $32 per unit for 2,000 units.
If the firm chooses to accept the special order and reject some regular sales,the effect on operating income would be
A)a $20,000 increase. 
B)a $16,000 decrease. 
C)a $4,000 increase. 
D)$-0-.

Quizplus · Accepted Answer

The Answer of Gundy Company manufactures a product with the following costs per unit at the expected production of 30,000 units:  The company has the capacity to produce 30,000 units.The product regularly sells for $40.A wholesaler has offered to pay $32 per unit for 2,000 units.
If the firm chooses to accept the special order and reject some regular sales,the effect on operating income would be
A)a $20,000 increase. 
B)a $16,000 decrease. 
C)a $4,000 increase. 
D)$-0-.

Gundy Company Manufactures a Product with the Following Costs Per