ACTG2020_Week5 2014 Ch12CMD (1)

In other words net operating income will increase by

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Unformatted text preview: ) Increase in costs (3,000 × $8 variable cost) Increase in net operating income $ 30,000 24,000 $ 6,000 Note: This answer assumes that the fixed costs are unavoidable and that variable marketing costs must be incurred on the special order. LO 2 Accept or Reject a Special Order A travel agency offers Worldwide Airways A travel agency offers Worldwide Airways $150,000 for a round-trip flight from Hawaii to $150,000 for a round-trip flight from Hawaii to Japan on a jumbo jet. Japan on a jumbo jet. Worldwide usually gets $280,000 in revenue from Worldwide usually gets $280,000 in revenue from this flight. this flight. The airline is not currently planning to add any The airline is not currently planning to add any new routes and has two planes that are idle and new routes and has two planes that are idle and could be used to meet the needs of the agency. could be used to meet the needs of the agency. The next screen shows cost data developed by The next screen shows cost data developed by managerial accountants at Worl...
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This note was uploaded on 03/28/2014 for the course ACTG 2020 taught by Professor Lizfarrel during the Spring '11 term at York University.

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