Reference no: EM131794609

Apex Company produces artificial Christmas trees. A local shopping mall recently made a special orderoffer; the shopping mall would like to purchase 200 extraminus-large white trees. Apex Company is currently producing and selling20,000 trees; the company has the excess capacity to handle this special order. The shopping mall has offered to pay$120 for each tree. An accountant at Apex Company provides an estimate of the unit product cost asfollows:

This special order would require an investment of$10,000 for the molds required for the extraminus-large trees. These molds would have no other purpose and would have no salvage value. The special order trees would also have an additional variable cost of$5.00 per unit associated with having a white tree. This special order would not have any effect on thecompany's other sales. If the special order isaccepted, thecompany's operating income would increase(decrease) by