AAA Co. produces electric blankets. The cost of producing and selling one blanket at the company's normal activity level of 75,000 units per month is as follows:

Direct Materials	$30.00
Direct Labour	5.90
Variable Manufacturing Overhead	2.40
Fixed Manufacturing Overhead	17.20
Variable Selling & Administrative Expense	1.80
Fixed Selling & Administrative Expense	6.30

The normal selling price of the product is $75.00 per unit. A request has been received from an overseas customer for 2,300 units to be delivered this month at a special discounted price of $66.10. This order would have no effect on the company's normal sales and would not change any of the fixed costs. The variable selling and administrative expense would be $1.00 less per unit on this order than on normal sales. Required:

Each of the three scenarios below is independent of the others.

a) There is sufficient idle capacity to produce the units. By how much would this special-order increase or decrease the company's operating income for the month?

b) AAA is already operating at capacity when the special order is received. If AAA decided to accept this order to expand into this geographic area, compared to the current level of sales (75,000 units at full capacity) how much would operating income decrease as a result of shifting the 2,300 domestic sales to the overseas buyer?

c) There is not enough idle capacity to produce all the units for the overseas customer, and accepting the special order would require cutting back on production of 1,300 units for regular customers. What would be the minimum acceptable price per unit for the special order for operating income to remain the same as current levels (75,000 domestic sales).