A company manufactures batons. If the company can manufacture 300000 batons a year at a variable cost of $750000 and a fixed cost of $450,000. Base on next year's predictions 240000 batons will be sold at 5.00 each. A special order is placed for 60,000 batons to be solf at a 40% discount off the regular price. Total fixed costs would be unaffected by this order. By what amount would the company's net operating income be increased or decreased as a result of the special order

Profit will increase by $30,000 as follows:
Units to manufacture=300,000. Variable Cost (VC) is $750,000. Variable cost per unit
is $750,000/300,000=$2.5. Fixed cost is $450,000. Average fixed per unit=$1.5 Total cost per unit is at $4 (2.5+1.5) making a profit of $1 per baton.
Regular sale of 300,000 batons will generate $300,000 profit,
Total selling price of the special order is reduced by 40%=40%x$5=$3
Because the fixed cost remain constant, the only expense to worry about in this special order is the variable cost of $2.5. Therefore $(3-2.5)=$0.50 profit per order
60,000 x0.5=$30,000 additional increase in profit.

slight correction. Regular sale is projected at 240,000 x $1= $240,000 profit. Additional increase $(240,000 +30,000)=$270,000