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The MNK Company has gathered the following information for a unit of its most popular product: Direct materials $ 6.40 Direct labor 3.20 Overhead (40%

The MNK Company has gathered the following information for a unit of its most popular product: Direct materials $ 6.40 Direct labor 3.20 Overhead (40% variable) 5.20 Cost of manufacture 14.80 Desired markup (50%) 7.40 Target selling price 22.20 The above cost information is based on 4,000 units. A foreign distributor has offered to buy 1,000 units at a price of $17.20 per unit. This special order would not disturb regular sales. Variable shipping and other selling expenses would be an additional $1.20 per unit for the special order. If the special order is accepted, MNK's operating profits will increase by:

$1,200.

$5,520.

$4,320.

$1,920.

$2,400.

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