Assume that Cane expects to produce and sell 110,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 25,000 additional Alphas for a price of $140 per unit. If Cane accepts the customers offer, it will decrease Alpha sales to regular customers by 12,000 units.

a. Calculate the incremental net operating income if the order is accepted?

should the special order be accepted?

[The following information applies to the questions displayed below. Cane Company manufactures two products called Alpha and Beta that sell for $195 and $150, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 123,000 units of each product. Its unit costs for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable foved manufacturing overhead Variable selling expenses Common foued expenses Total cost per unit Alpha Beta $ 40 $ 15 34 28 22 20 30 33 27 23 30 25 $ 193 $ 144 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars