Escudo Company

Escudo Company manufactures a single product with the following unit costs for 1,000 units:

Direct materials $2,400 Direct labour 960 Manufacturing overhead (30% variable) 1,800 Selling expenses (50% variable) 900 Administrative expenses (10% variable) 840 Total per unit $6,900

Recently, a customer approached the company about buying 100 units for $5,100 each. Currently, the models are sold to dealers for $7,800. The company's capacity is sufficient to produce the extra 100 units. No additional selling expenses would be incurred on the special order.

Refer to Escudo Company. What will be the impact on income if the special order is accepted?

	$0 (no change)
	$111,600 increase
	$180,000 decrease
	$398,400 increase