Delta Company produces a single product. The cost of producing and selling a single unit of this product at the companys normal activity level of 108,000 units per year is:

Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses $ 1.70 Fixed selling and administrative expenses 2.00 $1.70 $3.00 $1.00 $ 4.55 The normal selling price is $21 per unit. The company's capacity is 121,200 units per year. An order has been received from a mail-order house for 1,100 units at a special price of $18.00 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.) Annual profits would by