Rumba dance hall has offered to buy from muy bueno bakery 100 of its chocolate cakes for $25 each. no variable selling costs would need to be paid, but special packaging of $100 will have to be added. normally, muy bueno sells its cakes at $35 each. its costs per cake are:
materials, $12;
direct labor, $5;
variable factory overhead, $3;
fixed factory overhead, $2; and variable selling costs, $4.
1. how much net differential profit or loss will muy bueno make if it accepts this offer?

$400

Explanation:

Total Sales Value = No of chocolate cakes × sales price

                             = 100 × 25

                             = 2,500

Total Costs:

= materials + direct labor + variable factory overhead + special packaging

= ($12 × 100) + ($5 × 100) +  ($3 × 100) + 100

= $1200 + 500 + 300 + 100

= $2,100

Profit = Sales value - Total costs

         = 2,500 - $2,100

         = $400

Note: Fixed costs remain fixed thus will not be affected by acceptance of offer

Variable selling costs will be ignored as they will not be incurred as per the question

pretty sure c

explanation: