Assume Fineprint's printing capacity is 200,000 brochures, current monthly production is 150,000 brochures, and operating costs at the 150,000 level are as presented in case Exhibit 1. Also, assume this order will not affect any of Fineprint's current business with its regular customers.

A. Using the incremental analysis, provide an analysis of the total financial impact on Fineprint if the company accepts the order. Your analysis should be in a logical order and sufficient detail so that a financial professional can follow your calculations and justification.

Should Fineprint accept this potential order? Justify your reason (s).

C. Using the unit contribution margin analysis, provide your analysis of the total financial impact on Fineprint if the company accepts the order. Your analysis should be in a logical order and sufficient detail so that a financial professional can follow your calculations and justification.

Using unit contribution margin analysis should Fineprint accept this potential order? Justify your reason(s).

John Johnson reflected on both offers he had received in the past couple of d2h, First, Abbie Jenkins, a friend of Johnson's and the owner of a small company in nearby Keswick, Virginia, had called to see if Johnson's printing company, FinePrint Company, owner of a SmallPrint Shop, had stopped by to see if FinePrint Charlottesville, Virginia, ealled printing color brochures over the next few months. COMPANY BACKGROUND Johnson's company, FinePrint Company, printed elaborate high-quality color brochures in its facility located in Charlottesville, Virginia. It primarily served other businesses in the central Virginia area, although it did have some clients in southwes. Virginia and as far east as the Chesapeake Bay region of the state. Monthly production at its Charlottesville facility was running at around full capacity of 150,000 brochures per month. John Johnson owned and managed the company. He employed one sales representative and one printing press operator, although he frequently relied on temporary labor to help in the printing process as needed to accommodate any changes in printing volume. John felt that many of his costs were fixed, but that some costs varied with the number of brochures he printed and sold. Exhibit 1 contains information related to FinePrint's monthly operating costs for the company's current activity level of 150,000 brochures per month. The company typically priced its printing services at an average of $17 per 100 brochures printed. Historically, Johnson had encountered little variation in pricing from job to job, although occasionally, special situations did arise. He wondered how he should handle those special situations. He didn't have a "rule of thumb" he could apply, but he wished he could find one. THE SPECIAL ORDER In her phone call, Abbie Jenkins indicated that she needed a special job printed next month. She needed 25,000 brochures related to a new product for distribution at three trade shows she was attending. When John quoted Abbie the usual price of \$17 per 100 brochures, Abbie sighed. "John, I know that FinePrint does a high-quality job, but I'm shorn on funds right now because I have spent so much on getting this new product up and running. I can't go any higher than $10 per 100 brochures on this job. If you can'l do it for that, l'll have to go to someone else. I'm sure the brochures won't look as nice, but that's all l've got to spend." John was enthused about the potential business, but when he inquired about whether Abbie would have future printing needs that FinePrint could help with, Abbie expressed doubt. "We just don't do much of this type of stuff. This is the first material we've had printed like this in years, and we're only doing it because we're trying to get this new product off the ground. I suspect this will be the last for a long while." John knew he didn't have the capacity at the moment to handle the special order. And, $10 per 100 brochures sounded low. John replied, "Let me look into this. I'm not sure we can do it for $10, but I'll be glad to think about it. I'll give you a call back in a couple of days." John realized that with this order he wouldn't have to pay his sales representative the typical sales commission of $1 per 100 brochures, but that $1 savings wouldn't begin to make up for the lower price. OUTSOURCING OPPORTUNITY Emest Bradley owned a local one-room printing operation called SmallPrint Shop. His largest customer had just informed him that it was going out of business and would no longer need his printing services. Most of SmallPrint's customers were small companies needing basic printing services in small quantities. But several of his customers, including his largest customer, used his services for both basic printing services and more elaborate work, including color brochures. Emest had a long-standing relationship with the customer's owner and had purchased the small printing press he used for color brochures partially to serve this customer's needs. He wasn't sure how he was going to get enough business to make up for this loss, especially since he primarily was known for his basic printing services rather than printing elaborate brochures. Ernest decided to stop by to talk with John Johnson, owner of FinePrint Company. "I've had some bad luck. My largest customer just informed me that it is closing its doors. I've been doing their color printing work for several years, and their closing leaves me with a lot of idle capacity. I wonder if you have any extra brochure printing I can help with. I'd be happy to do it really cheaply, just to keep my press going. I would go as low as $8 per 100 brochures. And I could handle 30,000 brochures for you next month." John thought that $8 per 100 brochures sounded like a good deal. He wasn't sure that even he could print that cheaply. And he knew that SmallPrint did a good job. He had used them before. They did high-quality work, and were dependable. FINEPRINT COMPANY Summary of Monthly Operating Costs