Meco Company Produces a Product That Has a Regular Selling

Multiple Choice

Meco Company produces a product that has a regular selling price of $360 per unit.At a typical monthly production volume of 2,000 units, the product's average unit cost of goods sold amounts to $270.Included in this average is $120,000 of fixed manufacturing costs.All selling and administrative costs are fixed and amount to $30,000 per month. Meco Company has just received a special order for 1,000 units at $240 per unit.The buyer will pay transportation, and the regular selling price will not be affected if Meco accepts the order.
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Assuming Meco Company has excess capacity, the effect on profits of accepting the order would be a

A) $60,000 increase.
B) $60,000 decrease.
C) $30,000 increase.
D) $30,000 decrease.