Reference no: EM132480508

Question - New Castle Company has the following data about its only product:

Fixed manufacturing costs $72,000

Fixed selling and administrative costs $ 80,000

Variable manufacturing costs $1,030,000

Variable selling and administrative costs $120,000

Selling price (per unit) $125

Units produced and sold 23,000

Assume there is excess capacity. The company has received a special order for 1,000 units at $80.00 per unit. If the special order is accepted, what will be the effect on operating income?

net income increases $30,000

net income increases $35,220

net income increases $80,000

$26,870