Current sales are 150,000 units at $75 per unit. Production capacity is 240,000 units. Variable costs are $42 per unit. Fixed costs are $1,200,000. A special order for 30,000 units at $60 each is received. It will require the purchase of new equipment for $120,000. The equipment will have a salvage value of $15,000 at the end of the contract. Should the offer be accepted?

Note: Use a negative sign with your answer to indicate a net decrease in gross profit, if applicable.

Should the offer be accepted?

\begin{tabular}{|l|ll|} \hline Differential revenue & $ & 0 \\ \hline Differential cost & & 0 \\ \hline Net increase (decrease) in profit & $ & 0 \\ \hline \hline \end{tabular}