2. Slugger Corporation produces baseball bats for kids that it sells for $36 each.At capacity, the company can produce 50,000 bats per year.The costs of producing and selling 50,000 bats are as follows:

Cost per batTotal Costs

Direct materials$13$650,000

Direct manufacturing labor5250,000

Variable manufacturing OH2100,000

Fixed manufacturing OH6300,000

Variable selling expenses3150,000

Fixed selling expenses2100,000

Totals$31$1,550,000

1.Suppose Slugger is currently producing and selling 40,000 bats.At this level of production and sales, its fixed costs are the same as those given above.Francona Company wants to place a one-time special order for 10,000 bats at $23 each.Slugger will incur no variable selling costs on the bats in this order.What would be the effect on Slugger's profitability if it accepted the order?(show calculations)

2.Now suppose Slugger is operating at maximum output of 50,000 bats and can sell to Francona only by diverting 10,000 bats from regular customers.At what price from Francona will Slugger be indifferent between options?(show calculations)