Chandler manufactures a single product with the following full unit costs for 3,000 units:

Direct materials $80

Direct labor 40

Manufacturing overhead (40% variable) 120

Selling expenses 40

Administrative expenses (10% variable) 20

Total per unit $300

A company recently approached Chandler with a special order to purchase 500 units for $300. Chandler currently sells the models to dealers for $550. Capacity is sufficient to produce the extra 1,000 units. No selling expenses would be incurred on the special order.

a. Should Chandler accept the special order if its goal is to maximize short-run profits? Determine the impact on profit of accepting the order. b. Determine the minimum price Chandler would want, to increase profits by $80,000 on the special order of 500 units.