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Manufacturer has received a special order of 7000 units at

Question - Manufacturing has a capacity of 45,000 units and is currently producing and selling 40,000 units at $23/unit. The present cost structure, per unit is:

Direct material: $10

Direct Labor: $5

Variable Overhead: $3

Fixed Overhead: $4

Manufacturer has received a special order of 7000 units at a price of $20/unit. How much will profit increase or decrease by if the order is accepted?

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