Gwinnett Barbecue Sauce Corporation Manufactures a Specialty Barbecue Sauce

Multiple Choice

Gwinnett Barbecue Sauce Corporation manufactures a specialty barbecue sauce.Gwinnett has the capacity to manufacture and sell 10,000 cases of sauce each year but is currently only manufacturing and selling 9,000.The following costs relate to annual operations at 9,000 cases:
Gwinnett normally sells its sauce for $30 per case.A local school district is interested in purchasing Gwinnett's excess capacity of 1,000 cases of sauce but only if they can get the sauce for $15 per case.This special order would not affect regular sales or total fixed costs or variable costs per unit.If this special order is accepted,Gwinnett's profits for the year will:

A) increase by $600
B) decrease by $1,000
C) decrease by $4,000
D) decrease by $6,600