lessard corporation special order 461191

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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