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Marston Manufacturing has an annual capacity of 50,000 units per year. Currently, the company is making and selling 78,000 units a year. The normal sales
Marston Manufacturing has an annual capacity of 50,000 units per year. Currently, the company is making and selling 78,000 units a year. The normal sales price is $120 per unit, variable cost are $90 per unit, and total fixed expenses are $2,000,000. An out-of-state distributer has offered to buy 12,000 units at &105 per unit. Marston's cost structure should not change as a result of this special order.
By how much will Marston's income change if the company accepts this offer?
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