Question: At Bargain Electronics, it costs $33 per unit ($18 variable and $15 fixed) to make an MP3 player at full capacity that normally sells for

At Bargain Electronics, it costs $33 per unit ($18 variable and $15 fixed) to make an MP3 player at full capacity that normally sells for $42. A foreign wholesaler offers to buy 4,260 units at $29 each. Bargain Electronics will incur special shipping costs of $1 per unit. Assuming that Bargain Electronics has excess operating capacity, indicate the net income (loss) Bargain Electronics would realize by accepting the special order.

Reject Order

Accept Order

Net Income Increase (Decrease)

Revenues

$

$

Costs-Manufacturing

shipping

Net income

$

The special order should be

Reject or expect

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