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Davis Manufacturers Inc. is approached by a prospective customer to fulfill a one-time-only special order. The company has excess capacity. The following per unit data
Davis Manufacturers Inc. is approached by a prospective customer to fulfill a one-time-only special order. The company has excess capacity. The following per unit data apply for sales to regular customers: Selling price $765 Variable costs: Direct materials $120 Direct labor 60 Manufacturing support 105 Marketing costs 45 Fixed costs: Manufacturing support 135 Marketing costs 45 Total costs $510 What is the change in operating profits if the one-time-only special order for 1,000 units is accepted for $540 a unit by Davis? $30,000 increase in operating profits $210,000 increase in operating profits $225,000 decrease in operating profits $30,000 decrease in operating profits
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