Sundial Company manufactures and sells watches for $40 each. Tick-Tock Company has offered Sundial $30...
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Sundial Company manufactures and sells watches for $40 each. Tick-Tock Company has offered Sundial $30 per watch for a one-time order of 5,900 watches. The total manufacturing cost per watch is $30 per unit and consists of variable costs of $22 per watch and fixed overhead costs of $8 per watch. Assume that Sundial has excess capacity and that the special pricing order would not adversely affect regular sales. What is the change in operating income that would result from accepting the special sales order? A. Increase of $47,200 B. decrease of $47,200 C. decrease of $177,000 D. increase of $177,000
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