CORRECT ANSWER C. IF JOHNSON ACCEPTED THE SPECIAL ORDER, THE CO...
235.
Correct answer c. If Johnson accepted the special order, the company’s operating income
would increase by $37,500 as shown below.
Special order price
$2.50
Less variable cost*
5.00
Contribution margin
$2.50
Contribution to operating income:
15,000 x $2.50 = $37,500
*Fixed costs and selling costs are not relevant