Win Co. Produces a single product. Its normal selling price is $26.00 per unit.

Question

Win Co. Produces a single product. Its normal selling price is $26.00 per unit. The variable costs are $18.00 per unit. Fixed costs are $22,921.00 for a normal production run of 5,000 units per month. Win received a request for a special order that would not interfere with normal sales. The order was for 1,535 units and a special price of $20.00 per unit. Win Co. has the capacity to handle the special order and, for this order, a variable selling cost of $2 per unit would be eliminated.

Assuming the order is accepted, determine the impact on net income.

Select the correct answer.

Explanation / Answer

c. increase of $32,857.25

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