Ease Products manufactures t$-$shirts. It has the following costs when its production level is $90,000$ units $($t$-$shirts$)$:

$($Click the icon to view the costs.$)$

$($i$)($Click the icon to view additional information.$)$

What will happen to Ease's operating income if it accepts this special order?

zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin and$/$or operating income from the special order.$)$

Incremental Analysis of Special Sales Order Decision

Per Unit

Total Order

Revenue from special order

Less variable expense associated with the order:

Direct materials

Direct labor

Variable manufacturing overhead

Contribution margin

Less: Additional fixed expenses associated with the order

Increase $($decrease$)$ in operating income from the special order

More info

The company's relevant range extends to $104,000$ units. Ease has received a

special order for $9,000t-$shirts at a special price of $$51,750$ for the entire order. The

special order t$-$shirt would use a fabric that is less expensive than the standard

fabric used by Ease, which would allow Ease to save $$0\mathrm{.}30$ per t$-$shirt in direct

materials when manufacturing this special order. Ease has the excess capacity to

manufacture this special order. Its total fixed costs will not be impacted by the

special order.

Data table