Answer is
Increase by $11250
Net income for special order = total revenue – total variable costs
Total revenue = 1000*40 = $40000
Variable cost per unit = (total direct materials + direct labor + variable overhead + variable selling and administrative expenses)/ total units produced = (150000+225000+140000+60000)/20000 = $28.75
Profit per unit = unit selling price – unit variable cost = 40-28.75 = $11.25
Net income Increases due to special order = 11.25*1000 = $11250
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