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What would be the effect on net income if the order is

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Tango Company manufactures staplers and currently is operating at 70% of its capacity of 100,000 units. It has received an offer from a foreign office supply company to buy 10,000 staplers at $3 each. Normal selling price is $5 each. The units will be priced FOB shipping point. Fixed costs are $2 each and variable costs are $1.50 each.

What would be the effect on net income if the order is accepted? Label your dollar amount as an increase or decrease and show calculations.

Reference no: EM13574970

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