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Relay Corporation manufactures batons. Relay can manufacture 300,000 batons a year...

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Accounting

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Relay Corporation manufactures batons. Relay can manufacture 300,000 batons a year at a variable cost of $730,000 and a fixed cost of $400,000. Based on Relay's predictions for next year, 240,000 batons will be sold at the regular price of $7.00 each. In addition, a special order was placed for 60,000 batons to be sold at a 40% discount off the regular price. Total fixed costs would be unaffected by this order. By what amount would the company's operating income be increased or decreased as a result of the special order? Select one: a. \$252,000 increase b. $294,000 decrease c. $274,000 decrease d. \$106,000 increase

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