Question
Question Content Area Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs are $15 per unit. Fixed
Question Content Area
Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs are $15 per unit. Fixed costs are $19,800 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,400 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated.
If the order is accepted, what would be the impact on profit?
a.decrease of $5,880
b.increase of $9,800
c.increase of $12,740
d.increase of $7,840
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