Harcourt Manufacturing (HM has the capacity to produce 10,000 fax machines per year. HM currently produces and sells 7,000 units per year. The fax machines normally sell for $100 each. Modem Products has offered to buy 2,000 fax machines from HM for $60 each. Unit-level costs associated with manufacturing the fax machines are $15 each for direct labor and $40 each for direct materials. Product-level and facility-level costs are $50,000 and $65,000 respectively. How much would profit increase if HM accepted the special order

A: $10,000
B: $112,000
C: ($10,000)
D: ($112,000)

Answer rating: 100% (QA)

Only direct material cost and direct labor c... View the full answer