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Sky High Seats manufactures seats for airplanes. The company has the capacity to produce 10,600 seats per year, but is curren
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Answer #1

Fined cost per unit = $4

Existing units= 7500
Total fixed  cost= $ 30000

Existing operating Profit = ( ( 40- 22-5 ) *7500 ) - 30000 = $67,500

Operating Income after special order :

67500 + ( 3000 X ( 30 - 22 -5 ) ) = $76,500

Operating Income will increase by $9,000

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