Question
Becky manufactures and sells clay pots that retail for $42 each. Beckys total manufacturing cost per pot is $27, consisting of $21 in variable costs
Becky manufactures and sells clay pots that retail for $42 each. Beckys total manufacturing cost per pot is $27, consisting of $21 in variable costs and $6 in fixed overhead costs. Becky received an offer from Home Designs, Inc., to purchase 7,500 clay pots for $24 each. Becky has excess capacity to fill the order. By how much will Beckys revenue and expenses increase due to the special order?
A : $315,000 increase in revenue; $202,500 increase in expenses.
B : $315,000 increase in revenue; $157,500 increase in expenses.
C : $180,000 increase in revenue; $202,500 increase in expenses.
D : $180,000 increase in revenue; $157,500 increase in expenses.
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