Subjects: Standard Costs and Variances. Differential Analysis: Key to decision making

Please assist in solving 21 to 30

30 - Gwinnett Barbecue Sauce Corporation manufactures a specialty barbecue sauce. Gwinnett has the capacity to manufacture and sell 10,000 cases of sauce each year but is currently only manufacturing and selling 9,000. The following costs relate to annual operations at 9,000 cases: Variable Manufacturing Cost Fixed Manufacturing Cost Variable Selling and Admin Cost Fixed Selling and Admin Cost Total Cost 126,000 45,000 18,000 27,000 Gwinnett normally sells its sauce for $30 per case. A local school district interested in purchasing Gwinnett excess capacity of 1,000 cases of sauce but only if they can get the sauce for $15 per case. This special order would not affect regular sales or total fixed costs or variable costs per unit. If this special order is accepted, Gwinnett's profits for the year will: A) increase by $600 B) decrease by 1,000 C) decrease by 4,000 D) decrease by 6,600