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Ag1-y3R Company has just obtained a request for a special order of 10,000 units to be shipped at the end of the month at a
Ag1-y3R Company has just obtained a request for a special order of 10,000 units to be shipped at the end of the month at a selling price of $24 each. The company has a production capacity of 70,000 units per month. At present, the company is selling 64,000 units per month through regular channels at a selling price of $28 each. For these regular sales, the cost for one unit is: variable production costs ....................... $6.80 fixed production costs .......................... $5.60 variable selling expenses ....................... $4.60 Ag1-y3R Company will not incur any selling expenses on the special order units. However, the special order units will require an additional shipping cost of $0.80 per unit. Calculate the amount by which Ag1-y3R Company's net income will increase if they accept the special order.
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