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Homework answers / question archive / Ag2-y6R Company has just obtained a request for a special order of 10,000 units to be shipped at the end of the month at a selling price of $19 each

Ag2-y6R Company has just obtained a request for a special order of 10,000 units to be shipped at the end of the month at a selling price of $19 each. The company has a production capacity of 90,000 units per month. At present, the company is selling 83,000 units per month through regular channels at a selling price of $22 each. For these regular sales, the cost for one unit is:

variable production costs $8.40 fixed production costs $3.30 variable selling expenses $2.70

Ag2-y6R Company will not incur any selling expenses on the special order units. However, the special order units will require an additional shipping cost of $0.30 per unit.

Calculate the amount by which Ag2-y6R Company's net income will increase if they accept the special order.

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