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Whose sales will not affect trescotts market

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Reference no: EM13825388

Trescott Company had the following results of operations for the past year:

Sales (20,000 units at $22)                            $440,000

Direct materials and direct labor                $200,000             

Overhead (40% variable)              100,000                

Selling and Administrative expenses (all fixed)      92,000                (392,000)

Operating income                            $ 48,000

A foreign company (whose sales will not affect Trescott's market) offers to buy 3,000 units at $17.00 per unit. In addition to the variable manufacturing costs, selling these units would increase fixed overhead by $500 and selling and administrative costs by $1,000. If Trescott accepts the offer, its profits will increase (decrease) by:

Reference no: EM13825388

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