Goody Buy Electronics has received an offer from a customer for $21,600 to purchase 12,000 external hard drives. Good Buy has budgeted sales of 200,000 hard drives totaling $500,000, with fixed costs of $260,000 and total costs of $420,000. Assuming that Good Buy has the capacity to produce the additional units and that accepting this order will not affect any other orders, what effect will accepting the order have on Good Buy’s profit?

1. Incremental profit will increase by $21,600
2. Incremental profit will decrease by $9,600
3. Incremental profit will decrease by $3,600
4. Incremental profit will increase by $12,000

Answer rating: 100% (QA)

The correct option is Incremental profit will incre... View the full answer