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Gwinnett Barbecue Sauce Corporation manufactures a specialty barbecue sauce. Gwinnett has the capacity to manufacture and sell 10,500 cases of sauce each year but is

Gwinnett Barbecue Sauce Corporation manufactures a specialty barbecue sauce. Gwinnett has the capacity to manufacture and sell 10,500 cases of sauce each year but is currently only manufacturing and selling 9,450. The following costs relate to annual operations at 9,450 cases:

Total Cost
Variable manufacturing cost $75,600
Fixed manufacturing cost $46,000
Variable selling and administrative cost $28,350
Fixed selling and administrative cost $28,000

Gwinnett normally sells its sauce for $20 per case. A local school district is interested in purchasing Gwinnett's excess capacity of 1,050 cases of sauce but only if they can get the sauce for $10 per case. This special order would not affect regular sales or total fixed costs or variable costs per unit. If this special order is accepted, Gwinnett's profits for the year will:

decrease by $9,450

increase by $105

decrease by $6,300

decrease by $1,050

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