Replica Products $($RP$)$ manufactures miniature models of airplanes, trains and automobiles as promotional items for corporate customers. A newly formed airline has approached RP to make $500$ models of its new livery $($logo design$)$ on a model Boeing $737,$ which it will send to travel agencies to serve as a marketing tool. RPs current per unit cost on Boeing $737$ models is direct materials $$8$; direct labour $$6\mathrm{.}50$; variable manufacturing overhead $$2\mathrm{.}00$; fixed manufacturing overhead $$5\mathrm{.}00.$ Such models are normally priced at $$34\mathrm{.}00/$unit$.$ Incorporating the new airline$$s livery into the production will require an additional cost of $$669.$ As the newly formed airline is rather cash poor, it is asking RP to make this one$-$time production run for $$28/$unit$.$ Assuming RP has the capacity and other orders would not be affected, how much total profit would RP earn from this special order?

Question $8$ Answer

a$.$

$$5,081$

b$.$

$$6,000$

c$.$

$$2,750$

d$.$

$$2,081$