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What the differential effect on profit would be a

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Question 1: Falcon Co. produces a single product. Its normal selling price is $28 per unit. The variable costs are $18 per unit. Fixed costs are $20,600 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,560 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated. If the order is accepted, the differential effect on profit would be a(n)

a. increase of $6,240

b. decrease of $3,744

c. increase of $4,992

d. increase of $8,112

Reference no: EM132589886

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