7. JOECO Industries is operating at 85% of its manufacturing capacity of 50,000 product units per year. A customer has offered to buy an additional 4,000 units at $25 each and sell them outside the country so as not to compete with JOECO. The following data are available: Costs at 85% capacity: Per Unit Total Direct materials $10.00 $425,000 Direct labor 8 340,000 Overhead (fixed and variable) 13 552,500 Totals $31.00 $1,317,500 In producing 4,000 additional units, fixed overhead costs would remain at their current level but incremental variable overhead costs of $4 per unit would be incurred. What is the effect on income if JOECO accepts this order? a) Income will decrease by $6 per unit. b) Income will increase by $6 per unit. c) Income will increase by $3 per unit. d) Income will decrease by $3 per unit. e) Income will increase by $7 per unit. 1 pts Use the following data to find the total direct labor cost variance: Direct labor standard (4 hrs. @ $7/hr.) $28 per unit Actual hours worked per unit 3.5 hours Actual units produced 3,500 units Actual rate per hour $7.50 $6,125 unfavorable $12,250 favorable $7,000 favorable $7,000 unfavorable $6,125 favorable ste ng O BE L 13 80%