Parker Brothers produces and sells a single product. Producing and selling a single unit of this product at the company's normal activity level of 60,000 units per year costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling & admin. expense Fixed selling & administrative expense $2.40 The product sells for $21 per unit. Parker Brothers' manufacturing capacity is 75,000 units per year. An order has been received from a specialty retailer for 15,000 units, at a reduced price of $14.00 per unit. This order would not affect regular sales. $5.10 S3.80 $1.00 $4.20 $1.50 If Parker Brothers accepts the order, how much will annual profits increase or decrease? (The order will not change the company's total fixed costs.) Parker Brothers has 1,000 units of this product left over from last year that are outdated and not as good as the current model. The units must be sold at reduced prices. What unit cost is relevant for establishing a minimum selling price for these units? When you think about this, think "clearance rack." When you see an item on a clearance rack for $2.99 that originally cost $50, most of the costs associated with the item are sunk, but there is one cost that still applies to selling the item. Explain. 1. 2. 1. Per unit 15,000 units Incremental sales Incremental costs: Direct material:s Direct labor Variable manufacturing overhead Variable selling and administrative Total incremental costs Incremental profits Annual profits will increase / decrease (circle one) by $ 2. The relevant cost is .Explanation