The following information relates to the Jasmine Company for the upcoming year, based on 400,000 units: 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 and Jasmine has sufficient capacity to handle the order. How much will operating profits increase if Jasmine accepts the special order?
A. $250,000
B. $50,000
C. $200,000
D. $125,000
Answer: C
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