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The result of operations for the past years for Baldwin company is as follows Sales (16,000 units@$10.25)$164,000 Direct Material and Direct Labor $100,000 Overhead (20%

The result of operations for the past years for Baldwin company is as follows

Sales (16,000 units@$10.25)$164,000

Direct Material and Direct Labor $100,000

Overhead (20% Variable)$20,000

Selling & Administrative Expenses (All fixed) $32,500($152,500)

Operating income $11,500

A foreign company whose sales will not affect Baldwin offers to buy 4500 units at $8.05 per unit. In addition to Variable Manufacturing costs. Selling these units would increase fixed overhead by $650 and Selling and Administrative cost by $350. If Baldwin accept the offer, by how much will the profit increase.

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