PRO 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. If the order is accepted, profit will:
A)Decrease by $2,000
B)Increase by $14,000
C)Increase by $7,000
D)Increase by $4,000

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The Answer of PRO 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. If the order is accepted, profit will:
A)Decrease by $2,000
B)Increase by $14,000
C)Increase by $7,000
D)Increase by $4,000

PRO Shops Has a Capacity of 45,000 Units and Is