Answer:
$27,420
Explanation:
The computation of the annual financial advantage or disadvantage for the company is shown below:
Incremental revenue (2,600 units × $31) $80,600
Incremental cost
Direct material (2,600 units × $6.20) $16,120
Direct labor (2,600 units × $3) $7,800
Variable manufacturing overhead (2,600 units × $3.30) $8,580
Additional variable cost (2,600 units × $1.80) $4,680
Special molds $16,000
Total incremental cost $53,180
Incremental profit (loss) $27,420
We simply deduct the all incremental cost from the incremental revenue so that the incremental profit or loss could come
