Question:
Braizen, Inc. produces a product with a $30 per-unit variable cost and an $80 per-unit selling price. Fixed manufacturing overhead costs are $100,000 per year. The company has received a special order request to sell an additional 8,000 units. The special order units will not incur a $2 per unit variable shipping cost that is associated with regular sales. Assume Braizen has the capacity to produce 80,000 units and they are currently selling 75,000 units to regular customers. Calculate the increase in company profits if Braizen accepts the special order at a selling price of $60 per unit.