Hawkins Company produces a single product. The cost of producing and selling a single unit of this product at the companys current activity level of 60,000 units per year is as follows:

Direct materials $5.10

Direct labor 3.80

Variable manufacturing overhead 1.00

Fixed manufacturing overhead 4.20

Variable selling and administrative expenses 1.50

Fixed selling and administrative expenses 2.40

The normal selling price is $21 per unit. The companys capacity is 75,000 units per year. An order has been received from a mail-order house for 15,000 units at a price of $14 per unit. This order would not affect regular sales.

Required

1. If the order is accepted, by how much will annual profits be increased or decreased? The order would not change the companys total fixed costs. Show computations to support your answer and be sure to identify the dollar amount as either an increase or decrease.