The PowerClean Company manufactures an engine for carpet cleaners called the "Snooper." Budgeted cost and revenue data for the "Snooper" are given below, based on sales of 40,000 units.

Sales revenue

$1,600,000

Less: Cost of goods sold

1,120,000

Gross margin

$480,000

Less: Operating expenses

100,000

Income

$380,000

Cost of goods sold consists of $810,000 of variable costs and $310,000 of fixed costs. Operating expenses consist of $30,000 of variable costs and $70,000 of fixed costs.

PowerClean received an order for 6,000 units at a price of $25.00. There will be no increase in fixed costs, but variable costs will be reduced by $0.54 per unit because of cheaper packaging. Determine the projected increase or decrease in profit from the order, assuming there are no opportunity costs.

Sales (6,000 x $25)$150,000

Less: Variable Costs @ $24.46146,760

Increase in Profit$3,240( is this correct?)