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Duncan Co. sells product P at a price of $38 a unit. The per-unit cost data are: direct materials $8, direct labour $10, and overhead $12 (25% fixed and 75% variable). Wolff has sufficient capacity to accept a special order for 40,000 units just received. Selling costs associated with this order would be $3 per unit.
Question 1: At a selling price of $33 per unit, the operating income will:
Group of answer choices
Option 1: Increase by $60,000
Option 2: Increase by $120,000
Option 3: Increase by $80,000
Option 4: Increase by $160,000
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