Answer :
Answer:
a) increase of $5,720
Explanation:
The relevant cash flows for this decision are:
- the variable cost of production- 17- 2 = 15 per unit × 1,430 = $21,450
- The sales revenue from the order- $19 × 1,430 = $27,170
The contribution from the special order would be determined as follows:
Contribution from special order = sales revenue - variable cost
= (19 - 15)× 1,430 = $5,720
Increase of = $5,720