First Prize Trophy Inc.manufactures trophies for sporting events and other contests.Its' manufacturing plant has the capacity to produce 7,000 trophies each month; current production and sales are 3,000 per month.The company normally charges $18 per trophy.Cost information for the current activity level is as follows:
Variable costs (vary with units produced):
Variable costs (vary with number of batches)*:
Fixed costs:
* Costs of $3,000 are based on 150 batches.The company has received an out of province special order for 1,500 trophies for $12 per trophy.Required:
Determine the incremental change in profit from accepting this order if the production batch size for the order is 30 units.Assume that current sales will not be affected.

Question

First Prize Trophy Inc.manufactures trophies for sporting events and other contests.Its' manufacturing plant has the capacity to produce 7,000 trophies each month; current production and sales are 3,000 per month.The company normally charges $18 per trophy.Cost information for the current activity level is as follows:
Variable costs (vary with units produced):
  Variable costs (vary with number of batches)*:
  Fixed costs:
  * Costs of $3,000 are based on 150 batches.The company has received an out of province special order for 1,500 trophies for $12 per trophy.Required:
Determine the incremental change in profit from accepting this order if the production batch size for the order is 30 units.Assume that current sales will not be affected.

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The Answer of First Prize Trophy Inc.manufactures trophies for sporting events and other contests.Its' manufacturing plant has the capacity to produce 7,000 trophies each month; current production and sales are 3,000 per month.The company normally charges $18 per trophy.Cost information for the current activity level is as follows:
Variable costs (vary with units produced):
  Variable costs (vary with number of batches)*:
  Fixed costs:
  * Costs of $3,000 are based on 150 batches.The company has received an out of province special order for 1,500 trophies for $12 per trophy.Required:
Determine the incremental change in profit from accepting this order if the production batch size for the order is 30 units.Assume that current sales will not be affected.