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University Of Rochester Operations And Supply Chain Management Assignment Help - Special Order

Question - Lessard Corporation manufactures a product with the following full unit costs at a avolume of 2,000 units: Direct materials $ 400 Direct labor 160 Manufacturing Overhead (30% variable) 300 Selling Expenses (50% variable) 150 Administrative Expenses (10% variable) 140 Total Per Unit $ 1,150 A company recently approached Lessard's management with an offer to purchase 200 units for $900 each. Lessard currently sells the product to dealers for $1,300 each. Lessard's capacity is sufficient to produce the extra 200 units. No selling expenses would be incurred on the special order. If Lessard's management accepts the offer, profits will: A. Decrease by $50,000 B. Increase by $47,200 C. Increase by $127,000 D. Decrease by $80,000

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