It costs oriole company $26 per unit ($18 variable and $8 fixed) to produce its product, which normally sells for $38 per unit. a foreign wholesaler offers to purchase 5600 units at $21 each. oriole would incur special shipping costs of $2 per unit if the order were accepted. oriole has sufficient unused capacity to produce the 5600 units. if the special order is accepted, what will be the effect on net income

Effect on income= $5,600 increase

Explanation:

Giving the following information:

It costs Oriole Company $26 per unit ($18 variable and $8 fixed) to produce its product, which normally sells for $38 per unit. A foreign wholesaler offers to purchase 5600 units at $21 each. Oriole would incur special shipping costs of $2 per unit if the order were accepted.

Because it is a special offer and there is unused capacity, we will not have into account the fixed costs.

Effect on income= (21-18 - 2)*5,600= $5,600increase

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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