Assume that the company is currently using all 7000 labour hours and suddenly has capacity to introduce 500 more labour hours at no extra costs. That said, all 500 hours need to be used to produce the Chile's Chivito sandwich. What would be the increase in cash flows?

Appendix 1 Sandwich Information Cubana Delight Existing Chacarero Beef Pambazo Chorizo Proposed Chile's Mediterranean Chivito Light 0.08 0.06 0.05 0.07 0.05 Labour per unit (hours) Estimated demand (units) Total labour hours 30,000 35,000 42,000 15,000 15,000 2,400 2,100 2,100 1,050 750 $9.50 $9.55 $9.00 $10.00 $8.00 (4.35) (4.55) (5.00) (4.85) (3.40) Sales price Direct materials Direct labour (1) Fixed overhead (2) Profit (0.96) (0.72) (0.60) (0.84) (0.60) (3.43) $0.76 (3.43) $0.85 (3.43) $(0.03) (3.43) $0.88 (3.43) $0.57