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Queeny Inc. produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 60,000 units per year is as follows: The normal selling price is $25 per unit. The company's capacity is 75,000 units per year. An order has been received from a mail-order house for 15,000 units at a special price of $16 per unit. This order would not affect regular sales. Required: a. If the order is accepted, by how much will annual profits be increased or decreased? (The order will not change the company's total fixed costs).
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