Samson Incorporated Provided the Following Information Regarding Its Only Product

Samson Incorporated provided the following information regarding its only product: Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 3,000 units at a sale price of $45 per product assuming additional fixed manufacturing overhead costs of $5,000 is incurred? (NOTE: Assume regular sales are not affected by the special order.)

A) Increase by $135,000
B) Decrease by $49,750
C) Increase by $49,750
D) Increase by $54,750

Correct Answer:

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