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Markson Company had the following results of operations for the past year: Sales (8,000 units at $20.50) $164,000 Variable manufacturing costs $88,000 Fixed manufacturing costs
Markson Company had the following results of operations for the past year:
Sales (8,000 units at $20.50) | $164,000 | |
Variable manufacturing costs | $88,000 | |
Fixed manufacturing costs | 15,500 | |
Variable selling and administrative expenses | 14,000 | |
Fixed selling and administrative expenses | 20,500 | (138,000) |
Operating income | $26,000 |
A foreign company whose sales will not affect Markson's market offers to buy 2,000 units at $14.75 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $1,650 for the purchase of special tools. If Markson accepts this additional business, its profits will:
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