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Brilliant, Inc. reported the following results from the sale of 24,000 units of IT-54: ...

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Accounting

Brilliant, Inc. reported the following results from the sale of 24,000 units of IT-54:

Sales $ 542,000
Variable manufacturing costs 240,000
Fixed manufacturing costs 144,000
Variable selling costs 53,800
Fixed administrative costs 35,700

Extra Company has offered to purchase 3,400 IT-54s at $15 each. Brilliant has available capacity, and the president is in favor of accepting the order. She feels it would be profitable because no variable selling costs will be incurred. The plant manager is opposed because the "full cost" of production is $16. Which of the following correctly notes the change in income if the special order is accepted?

Multiple Choice

  • $3,400 decrease.

  • $3,400 increase.

  • $17,000 decrease.

  • $17,000 increase.

  • None of the answers is correct.

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