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Riverbed Company is a leading manufacturer of sunglasses. One of Riverbeds products protects the eyes...

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Finance

Riverbed Company is a leading manufacturer of sunglasses. One of Riverbeds products protects the eyes from ultraviolet rays. An upscale sporting goods store has contacted Riverbed about purchasing 29,500 pairs of these sunglasses. Riverbeds unit manufacturing cost, based on a full capacity of 250,000 units, is as follows: Direct materials $6 Direct labor 4 Manufacturing overhead (75% fixed) 23 Total manufacturing costs $33 Riverbed also incurs selling and administrative expenses of $75,000 plus $2 per pair for sales commissions. The company has plenty of excess manufacturing capacity to use in manufacturing the sunglasses. Riverbeds normal price for these sunglasses is $40 per pair. The sporting goods store has offered to pay $36 per pair. Since the special order was initiated by the sporting goods store, no sales commission will be paid. What would be the effect on Riverbeds income if the special order were accepted? Riverbeds income will select an option increase by $enter a dollar amount

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