Dawson Company produces and sells 80,000 boxes of specialty foods each year. Each box contains the same assortment of food. The company has computed the following annual? costs:

Cost Item	Total Costs
Variable production costs	$400,000
Fixed production costs	480,000
Variable selling costs	320,000
Fixed selling and administrative costs	200,000
Total costs	$1,400,000

DawsonDawson normally charges $ 25 per box. A new distributor has offered to purchase 8,000 boxes at a special price of $ 22 per box.Dawson will incur additional packaging costs of $1

per box to complete this order.

Requirements

?(a)Suppose	Dawson has surplus capacity to produce 8,000 more boxes. What will be the effect on Dawson?'s income if it accepts this? order?
?(b)	(b) Suppose that instead of having surplus capacity to produce 8,000 more? boxes,Dawson has surplus capacity to produce only 3,000 more boxes. What will be the effect on Dawson?'s income if it accepts the new order for 8,000 ?boxes?

Requirement? (a) Suppose Dawson has surplus capacity to produce 8,000 more boxes. What will be the effect on Dawson?'s income if it accepts this? order?

Select the items that are relevant if the order is? accepted, then calculate the effect on income. ?Fill the boxes in the table with the $ amounts.

Total Additional Packing Cost	= $-----------------
Total incremental fixed cost	=$----------------
Total incremental revenue	=$-----------------
Total incremental variable cost	=$-----------------

$-------------------- in income $--------------