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First Image has a plant capacity of 80,000 units per month. Unit costs at capacity are: Direct materials $2.00 Direct labour 3.00 Variable overhead 1.50
First Image has a plant capacity of 80,000 units per month. Unit costs at capacity are: Direct materials $2.00 Direct labour 3.00 Variable overhead 1.50 Fixed overhead 1.50 Marketing - Fixed 3.50 Marketing/distribution - Variable 1.80 Current monthly sales are 78,000 units at $12.60 each. Computer Output Management has contacted First Image about purchasing 2,000 units at $12.00 each. Current sales would not be affected by the special order. What is First Image's change in profits if the order is accepted? A. $4,400 increase B. $7,400 increase C. $8,600 increase D. $3,600 decrease O E. $2,600 decrease
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