1. Boniatillo Corporation, which produces one product, had the following income statement for a recent month:

Boniatillo Corporation Income Statement

For the Month of March 2016

Sales	$30,000
Cost of goods sold	27,000
Gross profit	$3,000
Selling and administrative	2,500
Net income	$500

There were no beginning or ending inventories of work-in-process or finished goods. Boniatillo's manufacturing

costs were as follows:

Direct materials (1,200 units $5)	$6,000
Direct labor (1,200 units $8)	9,600
Variable overhead (1,200 units $4.50)	5,400
Fixed overhead	6,000
Total	$27,000
Average cost per unit	$22.50
Selling and administrative expenses are all fixed.

Boniatillo has just received a special order from a firm in China to purchase 900 units at $20 each. The order will not affect the selling price to regular customers.

Required:

1. Prepare a differential analysis of the relevant costs and revenues associated with the decision to accept or reject the special order, assuming Boniatillo has excess capacity.
2. Determine the net advantage or disadvantage (profit increase or decrease) of accepting the order, assuming Boniatillo does not have excess capacity.