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Akira Appliances Inc. manufactures grow lights. The production information for its basic grow light is follows: Monthly production capacity 20,000 units Current level of production
Akira Appliances Inc. manufactures grow lights. The production information for its basic grow light is follows:
Monthly production capacity | 20,000 units |
Current level of production | 15,000 units |
Normal selling price per unit | $50 per unit |
Manufacturing costs per unit: | |
Variable costs | $15 |
Fixed costs (allocated) | $10 |
During current month, the company received an offer to sell 4,500 lights to an exporter for $25 per unit. The order requires a special product modification which will increase the manufacturing costs of $2 per unit. Acceptance of this order does not affect the local sales.
How much would be the profit or loss from the acceptance of this offer?
Group of answer choices
$112,500 profit
$36,000 profit
$9,000 loss
$121,500 loss
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