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| Johnson Company manufactures a variety of shoes and has received a special one-time-only order directly from a wholesaler. Johnson has sufficient idle capacity to accept the special order to manufacture 15,000 pairs of sneakers at a price of $7.50 per pair. Johnson’s normal selling price is $7.00 per pair of sneakers. Variable manufacturing costs are $5.00 per pair and fixed manufacturing costs are $1.00 a pair. Johnson’s variable selling expense for its normal line of sneakers is $0.50 per pair. What would the effect on Johnson’s operating income be if the company accepted the special order? A. Decrease by $60,000. B. Increase by $22,500. C. Increase by $37,500. D. Increase by $52,500. |