Elhard Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of $40,000$ units per month is as follows:

Direct materials

$$18\mathrm{.}00$

Direct labor

$$6\mathrm{.}80$

Variable manufacturing overhead

$$2\mathrm{.}40$

Fixed manufacturing overhead.

$$11\mathrm{.}60$

Variable selling & administrative expense

$$1\mathrm{.}90$

Fixed selling & administrative expense

$$5\mathrm{.}10$

The normal selling price of the product is $$50$ per unit. An order has been received from an overseas customer for $2,000$ units to be delivered this month at a special discounted price of $$30$ per unit. This order would have no effect on the company's total amount of fixed costs. However, the variable selling and administrative expense would be $$0\mathrm{.}50$ less per unit on this

order than on normal sales. The company would also incur an extra $$750$ to deliver the products to the overseas customer.

By how much would total company profits increase or decrease if they accept the special order and what should they do$?$

A$)$ Reject because profits will decrease by $$31,350.$

B$)$ Reject because profits will decrease by $$30,600.$

C$)$ Accept because profits will increase by $$3,850.$

D$)$ Accept because profits will increase by $$2,050.$

E$)$ Accept because profits will increase by $$1,050.$