Wollongong Company Has a Current Production Level of 20 000

Multiple Choice

Wollongong Company has a current production level of 20 000 units per month.Unit costs at this level are:
$$\begin{array} { l r } \text { Direct materials } & \$ 0.25 \\\text { Direct labour } & 0.40 \\\text { Variable overhead } & 0.15 \\\text { Fixed overhead } & 0.20 \\\text { Marketing - fixed } & 0.20 \\\text { Marketing/distribution - variable } & 0.40\end{array}$$
Current monthly sales are 18 000 units.Jim Company has contacted Wollongong Company about purchasing 1500 units at $2.00 each.Current sales would not be affected by the one-time-only special order and variable marketing/distribution costs would not be incurred on the special order.What is Wollongong Company's change in operating profits if the special order is accepted?

A) $400 increase in operating profits
B) $1800 decrease in operating profits
C) $1800 increase in operating profits
D) $400 decrease in operating profits