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Surplus Tyre Company produces and sells 40,000 tyres per month. The normal sales price is...

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Accounting

Surplus Tyre Company produces and sells 40,000 tyres per month. The normal sales price is $30 per tyre. The costs to produce one tyre are $4 of direct materials, $3 of direct labor, $8 of variable overhead, and $2 of fixed overhead. A special order for 1,000 tyre at $15 each has been received. Assuming fixed overhead costs will not increase and present sales will not be affected, the profit increase or decrease from accepting this special order is:
Select one:
a. $0.
b. An $8,000 increase.
c. A $2,000 increase.
d. A $2,000 decrease.

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