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Berry Company produces and sells 2 0 , 0 0 0 cases of fruit preserves each year. The following information reflects breakdown of its costs:

Berry Company produces and sells 20,000 cases of fruit preserves each year. The following information reflects breakdown of its costs:
COST ITEM
COSTS PER CASE
Variable production costs
RM24
Fixed productions costs
RM12
Variable selling costs
RM6
Fixed selling and administrative costs
RM8
Total costs
RM50
TOTAL COSTS
RM480,000
RM240,000
RM150,000
RM90,000
RM960,000
Berry marks up its prices 40% over full costs. It has surplus capacity to produce 20,000 more cases. A French supermarket company has offered to purchase 15,000 cases of the product at a special price of RM34 per case.
Berry will incur additional shipping and selling costs of RM5 per case to complete this order.
What will be the effect on Berry's operating income if it accepts this order?

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