Centric Sail Makers manufacture sails for sailboats. The company has the capacity to produce 35,000 sails per year, and is currently producing and selling 25,000 sails per year. The following information relates to current production:

Sale price per unit $175

Variable costs per unit:

Manufacturing 60

Marketing and administrative 20

Total fixed costs:

Manufacturing $700,000

Marketing and administrative $300,000

If a special sales order is received for 5,500 sails at a price of $150 per unit

Required

1- Should the company accept this one-time special order? How will it affect the operating income, assuming that all fixed costs (manufacturing and marketing) are avoidable?

2- Should the company accept this one-time special order? How will it affect the operating income, assuming that only $300,000 out of the fixed costs (manufacturing and Marketing) are avoidable?