Xenon has received a special order for 120 units of its product at a special price of $1,850. The product normally sells for $2,350 and has the following manufacturing costs:
| |
Per unit |
| Direct materials |
$640 |
| Direct labor |
340 |
| Variable manufacturing overhead |
440 |
| Fixed manufacturing overhead |
540
|
| Total cost per unit |
$1,960
|
Assume that Xenon has sufficient capacity to fill the order without harming normal production and sales. If Xenon accepts the order, what effect will the order have on the company's short-term profit?