Answer: $14,500
Explanation:
Sales = 2,900 units × $19 per unit
= $55,100
Direct material = 2,900 units × $7
= $20,300
Direct labor = 2,900 units × $3
= $8,700
Variable Overhead = 2,900 units × 50% × 6
= $8,700
Variable shipping and other selling expense = 2,900 units × $1 per unit
= $2,900
Net profit from special order:
= Sales - Direct material - Direct labor - Variable Overhead - Variable shipping and other selling expense
= $55,100 - $20,300 - $8,700 - $8,700 - $2,900
= $14,500
Therefore, if the special order is accepted, Minton's operating profits will increase by $14,500.
