1. Floral Company manufactures and sells a single product called Gizmo. Operating at capacity, the company can produce and sell 30,000 Gizmo per year. Costs associated with this level of production and sales are given below:

	Unit
Direct materials	$13
Direct labor	6
Variable manufacturing overhead	3
Fixed manufacturing overhead	7
Variable S&A expenses	2
Fixed S&A expenses	4
Total	$35

The Gizmo normally sells for $45 each. A large retail chain has offered to purchase 5,000 Gizmo at a discounted $30 per unit. Fixed costs are not going to be affected by this special order; however, it will require the company to print their logo on Gizmo, which will incur extra $1 per unit of labor cost. What is the impact on profit, if the company accepts the special order? Should they accept or reject the special order?