Siegel Company is considering manufacturing an order of 3,000 units for another company.

Without the special order, the company had planned to produce 42,000 units of the product for a total cost of $168,000. If the special order is accepted, the unit cost of all units produced will decrease from $4.00 to $3.75.

The 42,000 units of regular production will be sold for $5 each; however, the other company is willing to pay only $3 per unit for the 3,000 units.

Required:

Prepare an analysis indicating the advantage or disadvantage if the company accepts the special order.