Assume that Bharu is manufacturing and selling at capacity (5,000 units) .Any special order will mean a loss of regular sales.Under these conditions if the special order from Woolgar Symphony Orchestra is accepted, the financial advantage (disadvantage) Bharu for the year should be:

A) $20,000
B) ($22,000)
C) ($28,000)
D) ($50,000)

The only difference is that Bharu would be selling 200 violins for $350 rather than $600; all of the costs would be the same.Total revenue (and profits)would decline by $50,000 [= 200 violins × ($600 per violin - $350 per violin)].
Reference: CH11-Ref16
Elfalan Corporation produces a single product.The cost of producing and selling a single unit of this product at the company's normal activity level of 80,000 units per month is as follows: The normal selling price of the product is $67.80 per unit.
An order has been received from an overseas customer for 3,000 units to be delivered this month at a special discounted price.This order would not change the total amount of the company's fixed costs.The variable selling and administrative expense would be $1.90 less per unit on this order than on normal sales.
Direct labor is a variable cost in this company.