Company RST produces and sells necklaces for $65 a unit. They have the capacity to produce 7,500 necklaces per month and they currently expect to have ordered from their regular customers for 5,700 necklaces per month. At this level of activity, the companys total costs are:

DM	68970
DL	74100
VOH	53580
FOH	87000
Varial selling expense	27360
fixed selling expense	38000
total cost	349010

The company has been asked if it can fill a one-time-only special order for a new customer who needs 1,200 necklaces and asked to pay $45 per necklace. This customer would like the necklaces customized, which would increase the direct materials cost by $3 per unit and the direct labor cost by $4 per unit. It also means the company will need to rent a new machine for $6,600 to complete the customization. However, the variable selling and administrative expenses will be reduced by $2 per unit for the special order because this customer will not need any support from the sales team.

1. Prepare a financial analysis that clearly shows the impact on Company RST if it accepts this special order. Should the company accept or reject this order? Explain your answer.
2. What is the lowest possible selling price that Company RST should be willing to accept for this special order?