Question Content Area Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs

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Question Content Area
Falcon Co. produces a single product. Its normal selling price
is $30 per unit. The variable costs are $16 per unit. Fixed costs
are $21,500 for a normal production run of 5,000 units per month.
Falcon received a request for a special order that would not
interfere with normal sales. The order was for 1,390 units with a
special price of $21 per unit. Falcon has the capacity to handle
the special order, and for this order, a variable selling cost of
$2 per unit would be eliminated. If the order is accepted, the
differential effect on profit would be a(n)
a.decrease of $5,838
b.increase of $7,784
c.increase of $9,730
d.increase of $12,649