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Riley, Inc. produces a single product and has the capacity to produce 70,000 units of this product each month. The per unit costs of this
Riley, Inc. produces a single product and has the capacity to produce 70,000 units of this product each month. The per unit costs of this product when 70,000 units are produced are shown below: direct materials $26.90 direct labor $ 5.80 variable overhead $ 2.50 fixed overhead $17.20 variable selling costs $ 1.80 fixed selling costs $ 6.70 The normal selling price of the product is $65.40 per unit. Riley is currently selling 68,400 units of this product to regular customers. Riley, Inc. has just obtained a request for a special order of 4,000 units to be shipped at the end of the current month at a discounted price of $57 per unit. The variable selling costs would only be $1.40 per unit on the special order. Calculate the increase in Riley, Inc.'s net income if they accept the special order.
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