Company makes small boats. The company produces and sells 5500 boats per year at a selling price of 160$ per boat. IVO Company has excess capacity and is trying to get special orders. A new retailer wants to purchase 1000 boats for 125$ per boat. IVO Company is going to decline the special order because it costs 130$ to make a single boat as seen below.

a) Should IVO Company reject the special order from new retailer? Why

b) How much will IVOs net income increase with the special offer?

	Per unit expense
Direct materials	50
direct manufacturing labor	55
Variable manufacturing overhead	10
fixed manufacturing overhead	15
Total per unit	130