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Blue Spruce Company is a leading manufacturer of sunglasses. One of Blue Spruce's products protects the eyes from ultraviolet rays. An upscale sporting goods store
Blue Spruce Company is a leading manufacturer of sunglasses. One of Blue Spruce's products protects the eyes from ultraviolet rays. An upscale sporting goods store has contacted Blue Spruce about purchasing 17,200 pairs of these sunglasses. Blue Spruce's unit manufacturing cost, based on a full capacity of 106,000 units, is as follows: $6 Direct materials Direct labor 5 Manufacturing overhead (60% fixed) 20 Total manufacturing costs $31 Blue Spruce also incurs selling and administrative expenses of $77,510 plus $3 per pair for sales commissions. The company has plenty of excess manufacturing capacity to use in manufacturing the sunglasses. Blue Spruce's normal price for these sunglasses is $44 per pair. The sporting goods store has offered to pay $35 per pair. Since the special order was initiated by the sporting goods store, no sales commission will be paid. What would be the effect on Blue Spruce's income if the special order were accepted? Blue Spruce's income will increase by $
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