XYZ manufactures seats for helicopters. The company has thecapacity to produce 100,000 seats per year, but is currentlyproduces and sells 75,000 seats per year.
Selling price per unit | $ 200 |
| |
Variable costs per unit: | |
Manufacturing | $ 110 |
Operating | $ 25 |
| |
Fixed costs: | |
Manufacturing | $ 375,000 |
Operating | $ 100,000 |
If a special sales order is accepted for 2,500 seats at a priceof $ 160 per unit, fixed costs increase by $ 2,500, and variablemarketing and administrative costs for that order are $12.50 perunit, how would operating income be affected?
I got answer of -($ 91,250)Please show the solution
