Markson Company had the following results of operations for the past year: ...
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Accounting
Markson Company had the following results of operations for the past year:
Sales (8,000 units at $20.50)
$164,000
Variable manufacturing costs
$88,000
Fixed manufacturing costs
15,500
Variable selling and administrative expenses
14,000
Fixed selling and administrative expenses
20,500
(138,000)
Operating income
$26,000
A foreign company whose sales will not affect Markson's market offers to buy 2,000 units at $14.75 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $1,650 for the purchase of special tools. If Markson accepts this additional business, its profits will:
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