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Sky High Seats manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but is currently producing and selling 75,000 seats per year. The following information relates to current production:
|
Sale price per unit |
$400 |
|
Variable costs per unit: |
|
|
Manufacturing |
$220 |
|
Marketing and administrative |
$50 |
|
Total fixed costs: |
|
|
Manufacturing |
$750,000 |
|
Marketing and administrative |
$200,000 |
If a special sales order is accepted for 7,000 seats at a price of $350 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)