Problem regarding budget information

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Reference no: EM13133437

Snyder, Inc., which has excess capacity, received a special order for 4,000 units at a price of $15 per unit. Currently, production and sales are anticipated to be 10,000 units without considering the special order. Budget information for the current year follows.

-Sales equal $190,000.
-Less: Cost of goods equal $145,000.
-Gross margin equal $45,000.

Cost of goods sold includes $30,000 of fixed manufacturing cost. If the special order is accepted, the company's income will:

A. increase by $2,000.

B. decrease by $2,000,

C. increase by $14,000.

D. decrease by $14,000.

E. change by some other amount.

Reference no: EM13133437

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