Export order Berry Company produces and sells 30,000 cases of fruit preserves each year. The following information reflects a breakdown of its costs:

Berry marks up its prices 40% over full costs. It has surplus capacity to pro¬ duce 15,000 more cases. A French supermarket company has offered to pur¬ chase 10,000 cases of the product at a special price of $40 per case. Berry will incur additional shipping and selling costs of $3 per case to complete this order. What will be the effect on Berry's operating income if it accepts this order?
LO 1, 2

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COST ITEM Variable production costs Fixed production costs Variable selling costs Fixed selling and administrative costs Total Costs COSTS PER CASE TOTAL COSTS $16 $480,000 8 240,000 5 150,000 3 90,000 $32 $960,000