The following information relates to the Jasmine Company for the upcoming year:Sales Amount Per UnitSales$8,000,000 $20.00 Cost of goods sold 6,400,000 16.00 Gross margin 1,600,000 4.00 Operating expenses 600,000 1.50 Operating profits$1,000,000 $2.50 The cost of goods sold includes $2,400,000 of fixed manufacturing overhead; the operating expenses include $200,000 of fixed marketing expenses. A special order offering to buy 50,000 units for $15.00 per unit has been made to Jasmine. Fortunately, there will be no additional operating expenses associated with the order; however, Jasmine is operating at full capacity. How much will operating profits increase if Jasmine accepts the special order?
A. $50,000.
B. Operating profits will not increase as a result of accepting the special order.
C. $200,000.
D. $125,000.
Answer: B
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