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Accounting

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Special Order Example #2 Garston Company produces a single model wind turbine and has an annual plant capacity of 3,000 units. Data concerning this product are given below: 2,500 units $ Annual sales at regular selling prices Manufacturing costs: Variable manufacturing cost per unit Fixed (annual) Selling and administrative expenses: Variable (sales commissions) Fixed (annual) 2,000 750,000 150 55,000 The company has received a special order for 650 units at a selling price of $2,700 each. The regular sales price is $3,000. The sales commissions on the 650 units would be reduced by one-third. This special order would have no impact on total fixed costs. 1. What effect would accepting the special order have on the company's net operating income

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