Burleson Company produces and sells 65,000 boxes of specialty foods each year. Each box contains the same assortment of food. The company has computed the following annual costs:

Cost Item	Total Costs
Variable production costs	$260,000
Fixed production costs	510,000
Variable selling costs	130,000
Fixed selling and administrative costs	170,000
Total costs	$1,070,000

Burleson normally charges $24 per box. A new distributor has offered to purchase 6,500 boxes at a special price of $22 per box.

Burleson will incur additional packaging costs of $3 per box to complete this order.

Requirements

(a)	Suppose Burleson has surplus capacity to produce 6,500 more boxes. What will be the effect on Burleson's income if it accepts this order?
(b)	Suppose that instead of having surplus capacity to produce 6,500 more boxes, Burleson has surplus capacity to produce only 2,000 more boxes. What will be the effect on Burleson's income if it accepts the new order for

Select the items that are relevant if the order is accepted, then calculate the effect on income. (Only complete the necessary answer boxes. Use parentheses or a minus sign for a net decrease in income.)

	in income

Part 2

Requirement (b) Suppose that instead of having surplus capacity to produce 6,500 more boxes, Burleson has surplus capacity to produce only 2,000 more boxes. What will be the effect on Burleson's income if it accepts the new order for 6,500

boxes?

Select the items that are relevant if the order is accepted, then calculate the effect on income. (Only complete the necessary answer boxes. Use parentheses or a minus sign for a net decrease in income.)

	in income