Question :
Win Co. Produces a single product. It's standard selling price is $30.00 per unit. The variable costs are $16.00 per unit. Fixed costs are $20,147.00 for a normal production run of 5,000 units per month. Win received a request for a special order that could not interfere with normal sales. The order was for 1,634 units and a individual price of $21.00 per unit. Win Co. has the capacity to handle the special order and, for this order, a variable selling cost of $2 per unit could be eliminated.
Consider the order is accepted, evaluate the impact on net income.
Select the correct answer.
a. decrease of $14,706.00
b. increase of $34,314.00
c. increase of $11,438.00
d. increase of $42,421.96