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Question - Ag2-y6R Company has just obtained a request for o special order of 10,000 units to be shipped of the end of the month at a selling price of $19 each. The company has a production capacity of 90,000 units per month. At present, the company is selling 83,000 units per month through regular channels at a selling price of $22 each. For these regular sales, the cost for one unit is:
Variable production costs $8.40
Fixed production costs $3.30
Variable selling expenses $2.70
Ag2-y6R Company will not incur any selling expenses on the special order units. However, the special order units will require on additional shipping cost of $0.30 per unit.
Required - Calculate the amount by which Ag2-y6R Company's net income will increase if they accept the special order.
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