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Delcatty Design Company manufactures expensive brass doorknobs. It has total assets amounting to F2,500,000 and liabilities of f'1,500,000. The fixed costs of producing and marketing the doorknob is ?2 50,000. The variable costs per unit are the manufacturing costs [materials, labor and overhead] and marketing costs of P500 per unit. The normal selling price of a doorknob is k2,200. After careful stud}.r of the production, it was determined that manufacturing overhead 1lavas closely related to material usage. Thus, manufacturing overhead to production is allocated based on pounds of materials used. The following are the production STANDARDS: Cost 1' Input Doorknob Direct Material [brass] 0.3 lbs. at #11? 3' lb. f" 35.10 Direct Labor 0.75 hrs. at ?200 3' hr. 150.00 Variable Manufacturing overhead Hit] j lb. 1: 0.3 lb. 18.00 ACTUAL results for July 201 I" are as follows: Production 3 5,000 doorknobs Direct Material Purchased 10,550 lb. at ?12 0 { lb. Direct Materials Used 10,400 lbs. Direct Lab or 26,2 2 5 hrs. for ?5,2? 1,200 1'e'ariable Manufacturing overhead ?641,500 C. Special order. An order has been received from an overseas customer for 1,006 units to be delivered this month. This order would have no eect on the company's normal sales and would not change the total amount of the company's fixed costs. The variable marketing cost would he 20% less per unit on this order than on normal sales. Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is at a discounted price of 25% less than its normal selling price per unit. [1 5) By how much would this special-order increase [decrease) the co mpany's net operating income for the month