Multiple Choice
The normal selling price of Daniel Company's product is $35 per unit.The costs of production are: direct materials,$6;direct labor,$5;variable overhead,$5;and fixed overhead,$6 (based on normal capacity) .The company has received a special order for 12,800 units at a unit sales price of $19.There is ample unused capacity to fill the order and $2 per unit will be incurred for additional packaging.If the order is accepted,operating income will
A) increase by $12,800.
B) decrease by $38,400.
C) increase by $38,400.
D) decrease by $12,800.
Correct Answer:
Verified
Correct Answer:
Verified
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