Walnut has received a special order for 2,000 units of its product at a special price of $270. The product normally sells for $360 and has the following manufacturing costs: Per unitDirect materials $108Direct labor 72Variable manufacturing overhead 54Fixed manufacturing overhead 36Unit cost $270Walnut is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Walnut accepts the order, what effect will the order have on the company's short-term profit?
A. $108,000 increase
B. zero
C. $180,000 decrease
D. $108,000 decrease
Answer: C
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