Question: Lemonade Delights produces 70,000 cases annually. Each case costs: Variable production: $20 Fixed production: $8 Variable selling: $6 Fixed selling/admin: $5 Total cost: $39 per

Lemonade Delights produces 70,000 cases annually. Each case costs:

Variable production: $20

Fixed production: $8

Variable selling: $6

Fixed selling/admin: $5

Total cost: $39 per case

Lemonade Delights marks up prices by 25% over full costs. The company can produce an additional 15,000 cases. A Japanese retailer has offered to buy 12,000 cases at $50 per case with additional shipping and selling costs of $3.50 per case. Calculate the effect on Lemonade's gross profit if it accepts this order.

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