Atlen Corporation manufactures jackets. The jackets are normally sold to retail outlets. The jackets normally sell for $45 per unit. Another company has offered to buy 1,000 jackets for $36,000 to use as work uniforms. The special order of jackets would need the company label added to the jackets which would increase the cost by an additional $2 per jacket.

The special order would have no effect on normal sales. The currect cost of making jackets for the company is given below. These cost are based on 5,000 units. The company has extra capacity to make the special order but fixed costs would increase by $4,000.

	Per Unit	Total (based on 5,000 units)
Direct Materials	10	50,000
Direct Labor	7	35,000
Variable Overhead	4	20,000
Fixed Cost	6	30,000

1 - How much will sales increase if the special order is accepted? $

2- How much is the variable cost per unit to make the special order jackets? $

3 - How much will total variable costs increase if the special order is accepted? $

4 - How much will fixed costs increase if the special order is accepted? $

5 - What is the total incremental cost of making the special order jackets? $

6 - By how much will the operating income of the company change if the special order is accepted? $