Grape Company produces and sells 45,000 bottles of grape juice each year. The following information reflects a breakdown of its costs:

Cost Item	Costs per Bottle	Total Costs
Variable production costs	$14	$630,000
Fixed production costs	$10	$450,000
Variable selling costs	$5	$225,000
Fixed selling and administrative costs	$4	$180,000
Total costs	$33	$1,485,000

Grape marks up its prices 40% over full costs. It has surplus capacity to produce 20,000 more bottles. A Chinese supermarket company has offered to purchase 10,000 bottles of the product at a special price of $38 per bottle. Grape will incur additional shipping and selling costs of $2 per bottle to complete this order.

Required: (a) What will be the effect on Grape's operating income if it accepts this order? (b) Prepare a detailed analysis of the incremental costs and benefits.