Question: Bonus Corps variable costs per unit are $3 for DM, $4 for DL, and $5 for variable manufacturing overhead. Fixed costs are $5 per unit.

Bonus Corps variable costs per unit are $3 for DM, $4 for DL, and $5 for variable manufacturing overhead. Fixed costs are $5 per unit. They produce a flashlight that has a $35 selling price. A new customer offers to purchase 3,000 flashlights if Bonus Corp could sell them for $15 each. If Bonus Corp takes the order, they will incur an additional variable cost per unit of $1. Enough excess capacity exists to take the order without losing any existing sales. If the special order is accepted, what will be the effect on net income?

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