Question:
Given the following data:
|
|
Total
|
Per Unit
|
|
Sales
|
$30,000
|
$10
|
|
Less variable expenses
|
18,000
|
6
|
|
Contribution margin
|
12,000
|
$ 4
|
|
Less fixed expenses
|
9,000
|
|
|
Net operating income
|
$ 3,000
|
|
The company has an opportunity to secure a special order of 800 units if it is willing to drop the selling price on these units to $9. In addition to the usual variable expenses, the costs of securing the special order would be $1,000. The company"s regular sales would not be affected by the special order. If the special order is accepted, the company"s overall net operating income will:
A) increase $2,400
B) increase $1,400
C) increase $2,200
D) decrease $2,200