Special order pricing Healthy Hearth specializes in lunches for the health con¬

scious. The company produces a small selection of lunch offerings each day. The menu selections may vary from day to day, but Healthy Hearth charges the same price per menu selection because it adjusts the portion sizes according to the cost of producing the selection. Healthy Hearth currently sells 5000 meals per month, and has sufficient idle capacity to accommodate a recent special order from a government agency to provide 1000 meals next month for senior citizens. Variable costs per meal are $3 per meal, and fixed costs total $5000 per month. Volunteers will deliver the meals to the senior citizens at no charge. The govern¬ ment agency is offering to pay Healthy Hearth $3.50 per meal. What will be the impact on Healthy Hearth's operating income if it accepts this special order?

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