Answer:
B) increase by $50,000
Explanation:
The computation of the incremental revenue is shown below:
= Number of units accepted in case of special order × price per unit - variable manufacturing cost - variable selling and administrative cost
= 10,000 units × $25 - $130,000 - $70,000
= $250,000 - $130,000 - $70,000
= $50,000
The variable manufacturing cost is
= 10,000 units × $13
= $130,000
And, the Variable selling and administrative costs is
= 10,000 units × $7
= $70,000