Question
Markson Company had the following results of operations for the past year: Sales (8,000 units at $21.00) $ 168,000 Variable manufacturing costs $ 90,000 Fixed
Markson Company had the following results of operations for the past year: Sales (8,000 units at $21.00) $ 168,000 Variable manufacturing costs $ 90,000 Fixed manufacturing costs 16,000 Variable selling and administrative expenses 16,000 Fixed selling and administrative expenses 21,000 (143,000 ) Operating income $ 25,000 A foreign company whose sales will not affect Markson's market offers to buy 2,000 units at $15.50 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $1,700 for the purchase of special tools. Marksons annual productive capacity is 12,000 units. If Markson accepts this additional business, its profits will:
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