Reference no: EM132560877

Zilch Corporation manufactures a single product with the following unit costs for 1,250 units:

Direct materials                                    $2,300

Direct labour                                           960

Factory overhead (30% variable)             1,800

Selling expenses (50% variable)                 900

Administrative expenses (10% variable)      840

Total per unit                                      $6,800

Recently, a company approached Zilch Corporation about buying 100 units for $5,100 each. Currently, the models are sold to dealers for $7,900. Zilch Corporation's capacity is sufficient to produce the extra 100 units. No additional selling expenses would be incurred on the special order.

Question 1: How much will income change if the special order is accepted?