Question - Mission Industries manufactures a product with the following costs per unit at capacity of 30,000 units.
Direct materials $5
Direct labor $15
Variable manufacturing overhead $8
Fixed manufacturing overhead $6
The company is currently operating at capacity (they cannot produce more than 30,000 units). The product regularly sells for $45. A wholesaler has offered to pay $40 each for 2,000 units.
What is the effect on net income, if Mission Industries accepts the special order?