QUESTION 30

1. Crandle Manufacturers Inc. is approached by a potential customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers: Variable costs:

   Direct materials

   $130

   Direct labor

   60

   Manufacturing support

   105

   Marketing costs

   95

   Fixed costs:

   Manufacturing support

   175

   Marketing costs

   65

   Total costs

   630

   Markup (50%)

   315

   Targeted selling price

   $945

   What is the change in operating profits if the one-time-only special order for 1,030 units is accepted for $550 a unit by Crandle?

   		$164,800 decrease in operating profits
   		$164,170 increase in operating profits
   		$164,170 decrease in operating profits
   		$164,800 increase in operating profits