Problem:
Preston Company manufactures a product with a unit variable cost of $140 and a unit sales price of $264. Fixed manufacturing costs were $720,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 3,000 units at $210 each in a foreign market which would not affect its present sales.
Required:
Question: If the company has sufficient capacity to produce the additional units, how would acceptance of the special order affect net income?
Note: Provide support for your rationale.