X Factor Sports received a special order for 1,000 units of its extreme snowboards at a selling price of $60 per snowboard. X Factor Sports has enough extra capacity to accept the order. No additional selling costs will be incurred.
Unit costs to make and sell this product are as follows: direct materials, $34; direct labour, $8; variable manufacturing overhead, $14; fixed manufacturing overhead, $10.
A) List the relevant costs.
B) What will be the change in operating income if X Factor Sports accepts the special order?
C) Should X Factor Sports accept the special order?
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