Voyage Sail Makers manufactures sails for sailboats. The company has the capacity to produce 37,000...
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Voyage Sail Makers manufactures sails for sailboats. The company has the capacity to produce 37,000 sails per year and is currently producing and selling 30,000 sails per year. The following information relates to current production: $180 Sales price per unit Variable costs per unit $60 $10 Manufacturing Selling and administrative Total fixed costs: S675,000 300,000 Manufacturing Selling and administrative If a special pricing order is accepted for 5,500 sails at a sales price of $150 per unit, and fixed costs remain unchanged, what is the change in operating income? (Assume the special pricing order will require variable manufacturing costs and variable selling and administrative costs.) A. Operating income decreases by $440,000 O B. Operating income decreases by $825,000 C. Operating income increases by $825,000 0 D. Operating income increases by $440,000
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