Beech Corporation manufactures silicone oils for sale to commercial construction companies. These oils sell for $325 per unit. Beechs capacity is for the manufacture of 10,000 units. Costs to manufacture a unit is:

Direct materials $125

Direct labor 100

Variable manufacturing overhead 40

Fixed manufacturing overhead 20

Variable marketing 15

Total $300

Resin Corp. has approached Beech Company for a one-time-only special order offering to buy 1,000 units at a price of $310 per unit.

a. If Beech is currently operating at 8,500-unit production level, calculate the change in Beechs Operating Income if Resins special order is accepted. Assume no additional marketing costs would be incurred for this special order.

b. Now assume Beech is operating at full capacity, producing, and selling 10,000 units. Calculate the change in Beechs Operating Income if Resins special order is accepted. Assume no additional marketing costs would be incurred for this special order.

c. If operating at full capacity and for short-term decision making should Beech accept or reject Resins offer? Why/why not?

d. If operating at full capacity and for long-term decision making should Beech accept or reject Resins offer? Why/why not?