Abby and Debby Incorporation is approached by a European customer to fill a special order for 5,000 units of the product Abby and Debby normally sells to its regular, domestic customers. The European customer has offered to pay $100/unit for the order. Abby and Debby incorporation incurs the following per-unit costs:

Direct materials	$56
Direct labour	$22
Variable manufacturing overhead	$19
Fixed manufacturing overhead	$14

The company has enough capacity to accept the special order.

Required (show all computations):

1. Which of the above costs are irrelevant to the special order decision? Explain why these costs are irrelevant.

2. By how much would operating income increase/decrease if Abby and Debby Manufacturing accepts the special order?