Power Drive, Inc. produces a hard disk drive that sells for $175 per unit.

The cost of producing 25,000 drives in the prior year was:Direct Material $625,000 Direct Labor 375,000 Variable Overhead 125,000 Fixed Overhead 1,500,000

Total cost $2,625,000

At the start of the current year, the company received an order for 3,600 drives from a computer company in China. Management of Power Drive has mixed feelings about the order. On the one hand they welcome the order because they currently have excess capacity.

Also, this is the companys first international order. On the other hand, the company in China is willing to pay only $140 per unit.

What will be the effect on profit of accepting the order?