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The following information relates to the Tram Company for the
upcoming year.
                       
Amount         Per Unit
Sales                  
$4,000,000     $10.00
Cost of Goods Sold      
3,200,000       8.00
Gross
Margin              
800,000       2.00
Operating
Expense         
300,000        .75
Operating Profits        
$500,000      $1.25
The cost of goods sold includes $1,200,000 of fixed manufacturing
overhead; the operating expenses include $100,000 of fixed
marketing expenses. A special order offering to buy 50,000 units
for $7.50 per unit has been made to Tram. Fortunately, there will
be no additional operating expenses associated with the order and
Tram has sufficient capacity to handle the order. How much will
operate profits be increased if Tram accepts the special order?
a. $25,000
b.$62,000
c. $100,000
d. $125,000

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