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Question: bluebird mfg has received a special onetime order for 15000...

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Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3 per unit. Bluebird currently produces and sells 75,000 units at $7.00 each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesaler’s name and would not affect Bluebird’s sales through its normal channels. Production costs for these units are $3.50 per unit, which includes $2.25 variable cost and $1.25 fixed cost. If Bluebird accepts this additional business, the effect on net income will be:

A) 45,000 Increase

B) 11,250 Increase

C) 33,750 Increase

D) 7,500 Decrease

E) 33,750 Decrease

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