Lowwater Sailmakers manufactures sails for sailboats. The company has the capacity to produce 25,000 sails per year, and is currently producing and selling 20,000 sails per year. The following information relates to current production: If a special sales order is accepted for 2,000 sails at a price of $95 per unit, and if the order requires both variable manufacturing and variable marketing and administrative costs, and if incremental fixed costs of $10,000 are required, what will be the impact on operating income?

Question

Lowwater Sailmakers manufactures sails for sailboats. The company has the capacity to produce 25,000 sails per year, and is currently producing and selling 20,000 sails per year. The following information relates to current production:  If a special sales order is accepted for 2,000 sails at a price of $95 per unit, and if the order requires both variable manufacturing and variable marketing and administrative costs, and if incremental fixed costs of $10,000 are required, what will be the impact on operating income?

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The Answer of Lowwater Sailmakers manufactures sails for sailboats. The company has the capacity to produce 25,000 sails per year, and is currently producing and selling 20,000 sails per year. The following information relates to current production:  If a special sales order is accepted for 2,000 sails at a price of $95 per unit, and if the order requires both variable manufacturing and variable marketing and administrative costs, and if incremental fixed costs of $10,000 are required, what will be the impact on operating income?

Lowwater Sailmakers Manufactures Sails for Sailboats