ore Manufacturing makes a single product. Budget information regarding the current period is given below:
Revenue (100,000 units at $8.00) $800,000
Direct materials $170,000
Direct labor 125,000
Variable manufacturing overhead 235,000
Fixed manufacturing overhead 110,000 640,000
Total $160,000
Deer Company approaches Core with a special order for 15,000 units at a price of $8.50 per unit. Variable costs will be the same as the current production and accepting the special order will not have any impact on the rest of the company%u2019s orders. However, Core is operating at capacity and will incur an additional $55,000 in fixed manufacturing overhead if the order is accepted. What is the incremental revenue associated with accepting the special order?
$127,500
$927,500
($7,000)
$47,500
Please show work. Thanks!