What effect would accepting the special order

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Question - Goodstone Tire Corporation sells tires for $100 each. Per unit costs associated with producing and selling the tires are:

Direct materials $35

Direct labour $10

Factory overhead $20

Variable portion of factory overhead $8

Selling and administrative $15

A foreign company wants to purchase 10,000 tires for $70 each. The order would not require any selling or administrative costs. The purchaser will pay the shipping costs, but Goodstone will have to pay a $100,000 inspection fee in order to be able to make the foreign sale. Accepting the special order will not affect current sales or production. What effect would accepting the special order have on Goodstone's net operating income?

Reference no: EM133137699

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