Question
Beta Company has a current production level of 25009 units per month of Product B. Unit costs of product B at this level consists of:
Beta Company has a current production level of 25009 units per month of Product B. Unit costs of product B at this level consists of:
Direct materials $0.80
Direct labour 0.27
Variable overhead 0.41
Fixed overhead 0.20
Marketing - fixed 0.81
Marketing/distribution - variable 0.41
Beta's current monthly sales is 23244 units. Delta Enterprise has contacted Beta Company about purchasing 1392 units at $2.16 each. Beta's current sales would not be affected by accepting Delta's one-time-only special order, and variable marketing/distribution costs would not be incurred on the special order. Compute Beta Companys change in operating profit if the special order is accepted. (If Beta's operating income decreases due to accepting the special order, present the answer as a negative figure, otherwise, present the answer without a sign.)
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