Walter Jewelry company produces a bracelet which normally sells for $79.95. the company produces 1,500 units annually but has the capacity to produce $2,000 units. A special order for manufacturing and selling 200 bracelets at $49.95 has been received which would not disrupt current operations. in addition, the customer would like to add a monogram to each bracelet which would require an additional $2.00 in additional labor costs and Walter Jewelry would also have to purchase a piece of equipment tocreate the monogram which would cost $1,600.00. This equipment would no longer have any other uses. With regard tothis special order ONLY

Currents Costs for the bracelet are as follows:

Direct Material $17.00

Direct Labor $14.50

Variable Overhead $4.00

Fixed Overhead $5.00

Total $40.50

Please choose answer from the following:

incremental revenues will beexceed incremental costs by $2,490

incremental revenues will exceed incremental costs by $890

incremental revenues will exceed incremental costs by $2,890

incremental revenuew wil exceed incremental costs by $1,290