Business, 16.10.2020 18:01 selfiegymnast

Visionary Game Company sells 600,000 units per year of a particular video game at $20 each. The current unit cost of the game is broken down as follows. Direct materials $5.00
Direct labor 2.00
Variable factory overhead 4.00
Fixed factory overhead (average cost per unit) 3.00
Total $14.00

At the beginning of the current year, Visionary received a special order for 12,000 of these games per month, for one year only, at a sales price of $11 per unit. To fill the order, Visionary will have to rent additional assembly space at a cost of $18,000 ($1,500 per month).

Required:
Compute the estimated increase or decrease in annual operating income that will result from accepting this special order.

Answers: 2

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Visionary Game Company sells 600,000 units per year of a particular video game at $20 each. The curr...

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