A business received an offer from an exporter for 10,000 units of product at $13.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $21 Unit manufacturing costs: Variable 12 Fixed 5 What is the amount of the gain or loss from acceptance of the offer

Effect on income = $15,000 increase

Explanation:

Giving the following information:

A business received an offer from an exporter for 10,000 units for $13.50 per unit.

Unit manufacturing costs:

Variable 12

Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.

Effect on income = number of units*unitary contribution margin

Effect on income = 10,000 * (13.5 - 12)

Effect on income = $15,000 increase