Cochran Corporation Has a Plant Capacity of 100 000 Units

Multiple Choice

Cochran Corporation has a plant capacity of 100 000 units per month.Unit costs at capacity are:
$$\begin{array} { l r } \text { Direct materials } & \$ 4.00 \\\text { Direct labour } & 6.00 \\\text { Variable overhead } & 3.00 \\\text { Fixed overhead } & 1.00 \\\text { Marketing-fixed } & 7.00 \\\text { Marketing/distribution-variable } & 3.60\end{array}$$
Current monthly sales are 95 000 units at $30.00 each.Suzie Inc. ,has contacted Cochran Corporation about purchasing 3000 units at $20.00 each.Current sales would not be affected by the one-time-only special order.What is Cochran's change in operating profits if the one-time-only special order is accepted?

A) $10 200 increase
B) $17 200 increase
C) $33 200 increase
D) $22 000 increase