Preston Wade, a local craftsman. Normally sells his handcrafted wooden birdhouses for $145 each. Preston has the capacity to produce as many as 60 birdhouses a week. Preston makes 20 birdhouses with the following costs per unit:
Direct materials.......................................................$12.00
Direct labor............................................................$15.00
Variable overhead...................................................$3.00
Fixed overhead.......................................................$5.00
..........................................................................$35.00
Refer to the Preston Wade information above. Preston has received a special other from a local plant nursery to purchase 40 birdhouses for a price $80 each. The nursery wishes to have the birdhouses engraved with their own logo, therefore, the order would require the rental of a special engraving tool at a cost of $250. If Preston accepts the special order, net income will increase by:
$1,050
$1,750
$2,000
$ 32,00