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URGENT Each year Molly Madison makes and sells 30,000 statues of The Thinker for $60/unit. She only has capacity to make 30,000 statues. Unit costs,

URGENT

Each year Molly Madison makes and sells 30,000 statues of The Thinker for $60/unit. She only has capacity to make 30,000 statues. Unit costs, based on this quantity, is as follows:

Direct materials $7
Direct labour 5
Variable production overhead 12
Fixed overhead 10
Variable selling expenses 5

Fixed overhead will be incurred regardless of production. An art dealer wants 5,000 statues with his label. The label will cost Molly an additional $1, but there would be no variable selling expenses on this special sale. Molly decides to accept the art dealers order at $58 per unit because she believes that he could become a valuable resource in the future.

How much would Mollys pre-tax profit change by accepting the order? (5 marks)

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