Carlsbad Enterprises has a capacity to produce 360,000 computer cases per year. The company is currently producing and selling 280,000 cases per year at a selling price of $396 per case. The cost of producing and selling one case follows:

Variable manufacturing costs $ 159

Fixed manufacturing costs 41

Variable selling and administrative costs 85

Fixed selling and administrative costs 20

Total costs $ 305

The company has received a special order for 40,000 cases at a price of $250 per case. Because it does not have to pay a sales commission on the special order, the variable selling and administrative costs would be only $52 per case. The special order would have no effect on total fixed costs. The company has rejected the offer based on the following computations:

Selling price per case $ 250

Variable manufacturing costs 159

Fixed manufacturing costs 41

Variable selling and administrative costs 52

Fixed selling and administrative costs 20

Net loss per case $ (22 )

Required:

Find the Status Quo for 280000 units and the alternative for 32000 units

	280000	320000
Sales Revenue
Variable Cost:
Manufacturing Cost
Selling and Administrative Cost
Contribution Cost
Fixed Cost
Operating Profit