How would operating income be affected

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Question - Dunder Mifflin sells all its paper at the following prices, with the following costs:

Sale price per unit: $150

Variable costs per unit:

Manufacturing: $90

Marketing: $25

Fixed Costs:

Manufacturing: $1,000,000

Marketing: $80,000

Required - How would operating income be affected if Dunder Mifflin accepts a special order of 5,000 units at a price of $130? Assume Dunder Mifflin has the capacity to produce the additional units; it still markets the new product; and its fixed costs will not change with the acceptance of the order.

a. Increase $75,000

b. Increase $750,000

c. Increase $525,000

d. Decrease $100,000

Reference no: EM132612319

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