Blowing Sand Company has just received a one-time offer to purchase 11,000 units of its Gusty model for a price of $38 each. The Gusty model normally sells for $46 and costs $42 to produce ($34 in variable costs and $8 of fixed overhead). Because the offer came during a slow production month, Blowing Sand has enough excess capacity to accept the order. 1. Should Blowing Sand accept the special order? Yes O No 2. Calculate the increase or decrease in short-term profit from accepting the special order. Profit by Decreases Increases Blowing Sand Company produces the Drafty model fan, which currently has a net loss of $59,000 as follows: Sales revenue Less: Variable costs Contribution margin Less: Direct fixed costs Segment margin Less: Common fixed costs Net operating income (loss) Drafty Model $ 240,000 168,000 $ 72,000 59,000 $ 13,000 72,000 $(59,000) Eliminating the Drafty product line would eliminate $59,000 of direct fixed costs. The $72,000 of common fixed costs would be redistributed to Blowing Sand's remaining product lines. Will Blowing Sand's net operating income increase or decrease if the Drafty model is eliminated? By how much? Total Profit by Decreases Increases