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 40,000 units. The product regularly sells for £40. A wholesaler has offered to pay £32 a unit for 2,000 units. If the firm is at capacity and the special order is accepted, the effect on operating income would be
A) a £20,000 increase.
B) a £16,000 decrease.
C) a £4,000 increase.
D) £-0-.
Correct Answer:
Verified
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