Reference no: EM131875428

Question - Tulius Corporation has received a request for a special order of 8000 units of product C64 for $50 each, but the units would need to be modified slightly for the customer. The normal unit product cost of C64 is computed as follows:

Direct materials $18.10

Direct labor $7.40

Variable mfg overhead $5.20

Fixed mfg overhead $4.80

Unit product cost $35.50

Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like some modifications made to product C64 that would increase the variable costs by $5 per unit and that would require a one time investment of $43000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. How much is the "effect" (incremental net operating income) on the company's total net operating income through accepting the special order?