Bert Asiago, a salesperson for Convertco, received an order from a potential new customer for $50,000$ units of Convertco's single product at a price $$25$ below its regular selling price of $$65.$ Asiago knows that Convertco has the capacity to produce this order without affecting regular sales. He has spoken to Convertco's controller, Bia Morgan, who has informed Asiago that at the $$40$ selling price, Convertco will not be covering its variable costs of $$42$ for the product, and she recommends the order not be accepted. Asiago knows that variable costs include his sales commission of $$4$ per unit. If he accepts a $$2$ per unit commission, the sale will produce a contribution margin of zero. Asiago is eager to get the new customer because he believes that this could lead to the new customer becoming a regular customer.

Required:

$1.$Determine the contribution margin per unit on the order as determined by the controller.

$2.$Determine the contribution margin per unit on the order as determined by Asiago if he takes the lower commission.

$3.$Do you recommend Convertco accept the special order? What factors must management consider?