RO Shops has a capacity of 45,000 units and is currently producing and selling 40,000 at $25 a unit. The present cost structure, on a per unit basis, is: Direct material $10 Direct labour 5 Variable overhead 3 Fixed overhead 4 An order for 7,000 units has been received from a Japanese company at a price of $20 per unit. The order size cannot be reduced. If the order is accepted, profit will: A. Not change B. Increase by $14,000 C. Decrease by $2,000 D. Increase by $7,000

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As the production cant change maximum production limit re... View the full answer