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Cute Chocolate Inc. (CCI) produces high-quality chocolate boxes for various occasions such as Eater, XMAS etc. The cost of producing and selling Chocolate big box
Cute Chocolate Inc. (CCI) produces high-quality chocolate boxes for various occasions such as Eater, XMAS etc. The cost of producing and selling Chocolate big box at the company's normal activity level of 60,000 units per year is as follows: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable General and administrative expense Fixed General and administrative expense $6.10 3.80 2.00 4.20 2.50 2.40 The normal selling price is $25 per unit. The company's capacity is 75,000 boxes per year. An order has been received from a leading a big company for 15,000 boxes at a special price of $16 per unit. This order would not affect regular sales. Required: 1. If the order is accepted, by how much will annual profits be increased or decreased? (The order will not change the company's total fixed costs.) (Do not round intermediate calculations.) Annual profits will decrease by 9,787
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