Salish Industries manufactures a product with the following costs per unit at the expected production of 60,000 units: $\begin{array}{lr}
\text { Direct materials } & £ 8 \
\text { Direct labour } & 15 \
\text { Variable manufacturing overhead } & 10 \
\text { Fixed manufacturing overhead } & 12
\end{array}$ The company has the capacity to produce 70,000 units. The product regularly sells for £60. A wholesaler has offered to pay £55 each for 5,000 units. If the special order is accepted, the effect on operating income would be a
A)£42,000 decrease.
B)£67,000 increase.
C)£110,000 increase.
D)£182,000 decrease.

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The Answer of Salish Industries manufactures a product with the following costs per unit at the expected production of 60,000 units: $\begin{array}{lr}
\text { Direct materials } & £ 8 \
\text { Direct labour } & 15 \
\text { Variable manufacturing overhead } & 10 \
\text { Fixed manufacturing overhead } & 12
\end{array}$ The company has the capacity to produce 70,000 units. The product regularly sells for £60. A wholesaler has offered to pay £55 each for 5,000 units. If the special order is accepted, the effect on operating income would be a
A)£42,000 decrease.
B)£67,000 increase.
C)£110,000 increase.
D)£182,000 decrease.

Salish Industries Manufactures a Product with the Following Costs Per