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Falcon Co. produces a single product. Its normal selling price is $28 per unit. The...

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Accounting

Falcon Co. produces a single product. Its normal selling price is $28 per unit. The variable costs are $16 per unit. Fixed costs are $20,900 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,460 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated. If the order is accepted, the differential effect on profit would be a(n)
a. decrease of $5,256
b. increase of $7,008
c. increase of $11,388
d. increase of $8,760
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