Baxter, Inc. manufactures high-end copiers used in businesses and sells their copiers directly to businesses through in-house sales representatives. The following are the budgeted costs for the year for the expected production of 3,000 copiers; actual costs to date have been tracking very close to budget:

Unit-level costs:
Material costs (3,000 units x $120)	$360,000
Labor costs (3,000 units x $ 95)	$285,000
Manufacturing overhead (3,000 units x $12.50)	$ 37,500
Total Unit-Level Costs (3,000 units x $227.50)	$682,500
Batch-level costs (15 batches x $1,800 per batch)	$ 27,000
Product-level costs	$77,750
Facility-level costs:
Segment-level costs	$105,000
Allocated-corporate level costs	$130,000
Total Facility-level costs	$235,000
Total Expected Cost	$1,022,250
Cost per unit: $1,022,250 3,000 units = $340.75

Office Leasing has approached Baxter, Inc. and has offered to buy 200 copiers directly from Baxter, Inc. at a price of $295.00 each. Baxter Inc.s normal selling price is $495.00 per copier. If Baxter, Inc. were to accept this special order, they would produce these 200 copiers using one additional batch run.

Required:

1. Identify the costs that are relevant to this business decision.

2. Should Baxter, Inc. accept the special order? Support your answer showing appropriate computations, including the amount of additional profit or loss that would result from accepting this special offer.