Applications of Differential Analysis

Moscot manufactures high$-$end sunglasses that it sells in retail shops and online for $$310,$ on average. Assume the following represent manufacturing and other costs.

The variable distribution costs are for transportation to retail partners. Assume the current monthly production and sales volume is $19,500$ units. Monthly capacity is $26,000$ units.

Required

Determine the effect of each of the following independent situations on monthly profits.

Note: Do not use negative signs with your answers.

Q$.$ d$.$ A Swiss distributor has proposed to place a special, one$-$time order for $7,800$ units at a special price of $$250$ per unit. The distributor would pay all transportation costs. There would be additional fixed selling and administrative costs of $$1,300.$ Assume overtime production is not possible.

Would there be INCREASE$/$DECREASE and by how much?