The Fast Trax Company manufactures adding machines. The company's capacity is 5,000 units per month; however, it currently is selling only 3,000 units per month. Company X has asked Fast Trax to sell 1,000 adding machines at $25 each. Normally, Fast Trax sells its product for $35. The company records report each adding machine's full absorption costs are $30 which includes fixed costs of $20. If Fast Trax was to accept Company X's offer, what would be the impact on Fast Trax's operating income?1. Additional profit of $15,0002. Additional profit of $25,0003. A loss of $5,000 on this order4. A loss of $10,000 on this order
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