Speical Order

Soni, LTD produces wall mounts for flat panel television sets. The forecasted income statement for 2017 is as follows:

SONI, LTD

Budgeted Income Statement

For the Year 2017Sales ($ 44 per unit)$ 4,400,000Cost of good sold ($ 36 per unit)(3,600,000)Gross profit800,000Selling expenses ($ 3 per unit)(300,000)Net income$ 500,000

Additional Information

(1) Of the production costs and selling expenses, $800,000 and $100,000, respectively, are fixed.

(2)Soni, LTDreceived a special order from a hospital supply company offering to buy 12,500 wall mounts for $30. If it accepts the order, there will be no additional selling expenses, and there is currently sufficient excess capacity to fill the order. The company's sales manager argues for rejecting the order because "we are not in the business of paying $36 to make a product to sell for $30."

Calculate the current production volume is

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units

The variable production cost are

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