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Business, 24.04.2020 23:42 pmbeachy3102

The Cozy Company manufactures slippers and sells them at $ 10 a pair. Variable manufacturing cost is $ 5.75 a pair, and allocated fixed manufacturing cost is $ 1.75 a pair. It has enough idle capacity available to accept a one-time-only special order of 25 comma 000 pairs of slippers at $ 7.50 a pair. Cozy will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales: (a) $0, (b) $ 43 comma 750 increase, (c) $ 143 comma 750 increase, or (d) $ 187 comma 500 increase? Show your calculations.

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