Question
Falcon Co, produces a single product. Its normal selling price is $27 per unit. The variable costs are $18 per unit. Fixed costs are $21,300
Falcon Co, produces a single product. Its normal selling price is $27 per unit. The variable costs are $18 per unit. Fixed costs are $21,300 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,620 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated. If the order is accepted, what would be the impact on profit? a. increase of $6,480 b. decrease of $3,888 c. increase of $8,424 d. increase of $5,184
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