Reference no: EM131641844

Question - Samson Incorporated provided the following information regarding its only product:

Sales price per unit: $50.00

Direct materials used: $160.00

Direct labor incurred: $185,000

Variable manufacturing overhead: $120,000

Variable selling and administrative expenses: $70,000

Fixed manufacturing overhead: $65,000

Fixed selling and administrative expenses $12,000

Units produced and sold: 20,000

Assume no beginning inventory

Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 1,200 units at a sale price of $47 per product? The 1,200 units would not require any variable selling and administrative expenses. (NOTE: Assume regular sales are not affected by the special order.)

A) Increase by $24,300

B) Decrease by $28,500

C) Increase by $28,500

D) Increase by $84,300