Alpine produces a single product. The company$$s March $2018$ income statement is as

follows:

Sales $(600$ x $$60)$ $$36,000$

Cost of goods sold $-33,000$

Gross profit $ $3,000$

Selling and administrative $2,000$

Net income $ $1,000$

There were no beginning or ending inventories of work$-$in$-$process or finished goods.

Alpine's full manufacturing costs were as follows:

Direct materials $(600$ units x $$10)$ $ $6,000$

Direct labor $(600$ units x $$16)9,600$

Variable manufacturing overhead $(600$ units x $$9)5,400$

Fixed manufacturing overhead $12,000$

Total $$33,000$

Average cost per unit $$55$

Selling and administrative expenses are all fixed. Alpine just received a special order

from a firm in Canada to purchase $450$ units at $$55$ each. The order will not affect the

selling price to regular customers.

Required:

a$.$ Prepare a differential analysis of the relevant costs and revenues associated with

the decision to accept or reject the special order, assuming Regal has excess capacity.

b$.$ Determine the net advantage or disadvantage $($profit increase or decrease$)$ of

accepting the order, assuming Regal does not have excess capacity.