Problem:
Production capacity of 15000 units. Manufacture costs: $12/unit variable, $90k in fixed, s&a: $3/unit variable and $60k fixed. Company sells 12,000 units annually\ at a price of $28. Special order wants to buy 3000 units for $20 each. Regular sales will not be affected; order can be filled without impact on FC. Sales commissions will be reduced by 1/3.
Required:
Question: Determine if they should accept special order or not.
Note: Please show how you came up with the solution.