Answer Happy

Lakeside Inc, produces a product that currently sells for $64.00 per unit. Current production costs per unit include direct materials, $23, direct labor , $25; variable overhead, $11.50; and fixed overhead, $11.50. Product engineering has determined that certain production changes could refine the product quality and functionality. These new production changes would increase material and labor costs by 20% per unit . Lakeside has received an offer from a nonprofit organization to buy 9,300 units at $60.70 per unit Lakeside currently has unused production capacity Required: a. Calculate the effect on Lakeside's operating income of accepting the order from the nonprofit organization increase in operating income