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Lattimer Company Had the Following Results of Operations for the Past

question 186

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Lattimer Company had the following results of operations for the past year:  Sales (15,000 units at $12) $18,000 Variable manufacturing costs $97,500 Fixed manufacturing costs 21,000 Selling and administrative expenses (all fixed)  36,000(154,500)  Operating income $25,500\begin{array}{l}\text { Sales } ( 15,000 \text { units at } \$ 12 ) &&\$18,000\\\text { Variable manufacturing costs } & \$ 97,500 & \\\text { Fixed manufacturing costs } & 21,000 & \\\text { Selling and administrative expenses (all fixed) } & 36,000 & ( 154,500 ) \\\text { Operating income } & & \$ 25,500\end{array} A foreign company whose sales will not affect Lattimer's market offers to buy 5,000 units at $7.50 per unit. In addition to existing costs, selling these units would add a $0.25 selling cost for export fees. Lattimer's annual production capacity is 25,000 units. If Lattimer accepts this additional business, the special order will yield a:

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