Answer the following question:

Flowering Company manufactures and sells flower pot stands. The companys normal selling price is $28 per unit. A breakdown of manufacturing cost per unit is provided below:

Direct materials $6.00

Direct labour $6.50

Variable manufacturing overhead $1.50

Fixed manufacturing overhead $4.00

Total manufacturing cost $18

The company receives a special order at $16 per unit for 5,000 units and needs to decide whether to accept this special order or not. Assume the company has excess capacity and regular sales will remain the same with or without this special order. Show your work.

1. Indicate whether the companys operating income will increase or decrease if it accepts the special order.

2. How much is the increase/decrease? Round your answer to whole amount.

3. Should the company accept this special order or not? Yes or no?