Platinum Company Has a Capacity of 45,000 Units, and Is

Multiple Choice

Platinum Company has a capacity of 45,000 units, and is currently producing and selling 40,000 at $25 a unit. The present cost structure, on a per unit basis, is: $\begin{array}{llcc} \text { Direct material} & \$10 \\ \text { Direct labour} &5\\ \text { Variable overhead } &3\\ \text { Fixed overhead } &4\\\end{array}$
An order for 7,000 units has been received from a New Zealand company at a price of $20 per unit. If the order is accepted, profit will:

A) Decrease by $2,000
B) Increase by $14,000
C) Increase by $7,000
D) Remain the same