Salish Industries manufactures a product with the following costs per unit at the expected production of 60,000 units: 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

Question

Salish Industries manufactures a product with the following costs per unit at the expected production of 60,000 units: 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

Quizplus · Accepted Answer

The Answer of Salish Industries manufactures a product with the following costs per unit at the expected production of 60,000 units: 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