Impact on profits if costa were to accept special order

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Reference no: EM131618977

Costa Company has a capacity of 40,000 units per year and is currently selling 35,000 for $400 each. Barton Company has approached Costa about buying 2,000 units for only $300 each. The units would be packaged in bulk, saving Costa $20 per unit when compared to the normal packaging cost. Normally, Costa has a variable cost of $280 per unit. The annual fixed cost of $2,000,000 would be unaffected by the special order. What would be the impact on profits if Costa were to accept this special order? options: A. Profits would increase $40,000. B. Profits would increase $60,000. C. Profits would decrease $200,000. D. Profits would increase $80,000

Reference no: EM131618977

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