Potter has received a special order for 10,000 units of its product at a special price of $24. The product normally sells for $32 and has the following manufacturing costs: Per unitDirect materials $9.60Direct labor 4.80Variable manufacturing overhead 3.20Fixed manufacturing overhead 9.60Unit cost $27.20Potter is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Potter accepts the order, what effect will the order have on the company's short-term profit?
A. $64,000 increase
B. $16,000 increase
C. $80,000 decrease
D. $64,000 decrease
Answer: C
Business
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