Barley Manufacturing produces Calculators and sels them for $6.50 each. A foreign retailer has offered to purchase 20,000 calculators for $4 per Calculator. The current average manufacturing cost per calculator is $4.50, $2.50 of variable cost and $2.0 of fixed cost. This special order would use manufacturing capacity that would otherwise be idle. No variable non-manufacturing cost would be incurred by the special order. Regular sales would not be affected by the special order.
Should Barley manufacturing accept the order?
What is the impact on income if Steube accepts the order?