(Solution) - Michigan Manufacturing has an opportunity to export 1 000 units of -(2025 Original AI-Free Solution)

Paper Details

Michigan Manufacturing has an opportunity to export 1,000 units of its product to a foreign country. The current selling price is $185, but the special order will be sold at a unit price of $139. This special order will not affect its current sales, all of which are domestic. Freight and shipping costs of $29 per unit would be incurred on the foreign order. Current variable manufacturing costs are $65 per unit manufactured, and variable selling and administrative costs are $34 per unit sold.
Included in variable selling expenses is a sales commission of $3 per unit, which would not apply to the foreign order. Fixed manufacturing costs are $185,000 per year and fixed selling and administrative expenses are $170,000 per year. The company now manufactures and sells 6,000 units per year.
What is the effect on profits if the special order is taken? Show all calculations.