Question

ky High Seats manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year. The following information relates to the current production of the product: Regular selling price per unit $400 Variable costs per unit: Manufacturing $220 Marketing and administrative $50 Total fixed costs: Manufacturing $1,500,000 Marketing and administrative $1,000,000 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.)

Increase by $800,000

Increase by $245,000

Decrease by $350,000

Increase by $560,000

Decrease by $157,500

Assume that Sky High Seats can sell all of 100,000  seats produced at the regular selling price.  When somebody wants the seats, Sky High Seats has to charge at least ________ per seat (in order to maximize the profit of Sky High Seats).     

		$400
		$395
		$220
		$370
		$350

Answer 1