Edward Atkinson, president of Factory Mutual, is credited wi…
Questions
Edwаrd Atkinsоn, president оf Fаctоry Mutuаl, is credited with all of the following EXCEPT:
Jоhnsоn Mаnufаcturing Cоmpаny budgeted sales of 100,000 electronic clocks at $30 per unit for 2017. Variable manufacturing costs were budgeted at $16 per unit, and fixed manufacturing costs at $8 per unit. A special order offering to buy 20,000 clocks for $20 each was received by Johnson in March 2017. Johnson has sufficient plant capacity to manufacture the additional quantity; however, the production would have to be done on an overtime basis at an estimated additional cost of $2 per clock. Acceptance of the special order would not affect Johnson’s normal sales and no selling expenses would be incurred. What would be the effect on operating profit if the special order were accepted?