Jansen Crafters has the capacity to produce 50,000 oak shelves per year and currently sells 44,000 shelves at $32 each. Cutrate Furniture has approached Jansen about purchasing 1,200 shelves for the bookcases it's building and is willing to pay $26 for each shelf. Packaging will not be required for bulk order. Jansen usually packs racks for Home Depot at $1.50 per rack. The $1.50 per rack cost is included in the $27 unit variable cost, along with the $320,000 annual fixed cost. However, the packaging cost of $1.50 will not apply in this case. Fixed costs will not be affected by the special order and the company has the capacity to accept the order. 

Given this information, what would be the profit if Jansen accepted the special order?

Answer rating: 100% (QA)

To calculate the profit if Jansen accepts the special order we need to consider the relevant costs a... View the full answer