elow are independent of each other Marofth hot just the final answer.

Chocolate Delight Company $($CDC$)$ makes holiday gift baskers that care of different chocolate$-$based treats. The firm estimates the following costs associated with the proc single gift basket when operating at full capacity.

Variable Costs

Direct materials

$$18\mathrm{.}20$

Direct labour

Manufacturing overhead

$$10\mathrm{.}92$

Sales commissions

$$14\mathrm{.}33$

Fixed Costs

$$5\mathrm{.}00$

Manufacturing Overhead

$$16\mathrm{.}00$

Selling & Administration

$9005$

$$12\mathrm{.}50$

CDC can produce $200$ baskets a day $(4,000$ baskets a month$)$ when they are operating CDC runs at full capacity every month of the year and produces $48,000$ baskets annua baskets sell for $$90\mathrm{.}00$ each.

Smiles For All $($SFA$)$ is a catering company specializing in large corporate events. SP to produce $1,000$ custom gift baskets for a large event that they are hosting on Dece SFA is willing to pay $$85\mathrm{.}00$ for each custom basket. The cost to produce a custom $$42\mathrm{.}55$ each. If this special order is accepted, CDC will have to dedicate five $(5)$ day the production of the SFA special order. During this time, no regular holiday gift b to be produced.

Questions

a$)$ If CDC accepts the special order, what will be the impact to their Operating considerations should CDC consider before accepting this offer?

Assume that the special order from SFA is only for $800$ units and CDC could their regular gift baskets. If CDC accepts the special order of $800$ units, wh their Operating Income?

Assume that in order for CDC to accept the special order, they will have t chocolate mixer. Their current mixer has a book value of $46,500,$ a rema years and a residual value of $$2,000.$ The new industrial mixer would co educe the variable cost of the special order items by $50\%.$ The new mix emaining useful life of five years at which time it could be sold for $$0.$

our coulement and is willing to work with SPA