Northern Glass Manufacturing has a current production level of 200,000 glass jars per month. Unit costs at this level are:
| Direct materials |
$0.345 |
| Direct labour |
0.400 |
| Variable overhead |
0.175 |
| Fixed overhead |
0.100 |
| Marketing minus- Fixed |
0.100 |
| Marketing/distribution minus- Variable |
0.200 |
Current monthly sales are 180,000 units. Canadian Hardware Ltd. has contacted Northern Glass Manufacturing about purchasing 15,000 units at $1.00 each. Current sales would not be affected by the special order, and variable marketing/ distributing costs would not be incurred on the special order.
What is NorthernGlass' change in profits if the order is accepted?
A. $4,800 increase
B. $1,200 increase
C. $300 decrease
D. $4,800 decrease
E. $1,800 decrease