Coca plc is a profitable business that produces a single product. The following information

is available concerning the product.

Per unit ()

Selling price 31

Variable costs (13)

Fixed costs (16)

Profit 2

An overseas business has recently offered to buy 4,900 units of the product for 16 per unit

over the next year.

If the order is accepted, the business will have to pay workers overtime rates to complete

the order, which will increase variable costs by 1 per unit. It will also means that a

separate factory, which is currently not being used but is part of the companys assets, will

have to be used to complete the order. The loan of the factory costs 5,500 per year to the

company.

What would be the net benefit (or loss) to the business if the order is accepted?