Gundy Company Manufactures a Product with the Following Costs Per

question 34

Multiple Choice

Gundy Company manufactures a product with the following costs per unit at the expected production of 30,000 units: The company has the capacity to produce 30,000 units.The product regularly sells for $40.A wholesaler has offered to pay $32 per unit for 2,000 units.
If the firm chooses to accept the special order and reject some regular sales,the effect on operating income would be

• A)a $20,000 increase.
• B)a $16,000 decrease.
• C)a $4,000 increase.
• D)$-0-.

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