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Kintectics Ltd can manufacture 480,000 electrical pumps a year at a variable cost of $15 per pump and fixed costs of $500,000. Kintectics Ltd budgeted that it can sell 400,000 at $25 each. An additional order of 100,000 was received, but at a discount of 35% from the regular price.
Question 1: If Kintectics Ltd accepts the special order, profit before taxes will:
Option 1: Decrease by $75,000
Option 2: Increase by $75,000
Option 4: Increase by $25,000
Option 5: Some other amount
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