1 Each year Molly Madison makes and sells 30,000 statues of "The Thinker" for $60/unit. She only has capacity to make 30,000 statues. Unit costs, based on this quantity, is as follows: Direct materials $ 7 Direct labour 5 Variable production overhead 12 Fixed overhead 10 Variable selling expenses 5 Fixed overhead will be incurred regardless of production. An art dealer wants 5,000 statues with his label. The label will cost Molly an additional $1, but there would be no variable selling expenses on this special sale. Molly decides to accept the art dealer's order at $58 per unit because she believes that he could become a valuable resource in the future. How much would Molly's pre-tax profit change by accepting the order

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Answer The negative profit i... View the full answer