Question:

if the company accept the special order, their net income will (increase or decrease) by?

OBJECTIVE Exercise 13-16 Special-Order Decision Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $7. The new cus- tomer is geographically separated from Smooth Move's other customers, and existing sales will not be affected. Smooth Move normally produces 82,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $12 per unit. Unit cost information is as follows: Direct materials $3.00 Direct labour Variable overhead Fixed overhead 1.80 Total $8.20 2.25 1.15