Camillas, a high fashion dress manufacturer, is planning to market a new cocktail dress for the coming year. Camillas supplies retailers primarily in the eastern states.

Four meters of materials are required to lay out the dress pattern. Some material remains after cutting, which can be sold. The leftover material could also be used to manufacture a matching wrap and handbag. However, if the leftover material is used for the wrap and handbag, more care will be required in the cutting operation, which will increase the cutting cost.

The company expects to sell 1250 dresses. Market research reveals that dress sales will be 20 percent higher if a matching wrap and handbag are available. The market research indicates that the wrap and handbag will be saleable only as accessories with the dress. The combination of dresses, wraps and handbags expected to be sold by retailers are as follows:

	Percentage of total
Complete sets of dress, wrap and handbag	70%
Dress and wrap	6%
Dress and handbag	15%
Dress only	9%
Total	100%

The material used in the dresses costs $20 a meter or $80 for each dress. The cost of cutting the dress if the wrap and handbag are not manufactured is estimated at $32 a dress, and the left-over material can be sold for $8 per dress. If the wrap and handbag are manufactured, the cutting costs will increase by $14.40 per dress and there will be no saleable remnants. The selling prices and the costs to complete the three items once they are cut are shown in the table below.

	Selling price per unit	Unit cost to complete (excludes costs of material and cutting operation)
Dress	$320.00	$128.00
Wrap	44.00	31.20
Handbag	15.20	10.40

Required:

1. Calculate Camillas incremental profit or loss from manufacturing the wraps and handbags in conjunction with the dresses. Assume that Camillas produces only sufficient product to meet sales demand.