Hello,

Can someone please assist with understanding the following calculations for Austin Widgets.

Austin Widgets, Inc.has received a special order for 2,000 units of its product at a special price of $75. The product normally sells for $100 and has the following manufacturing costs:

per unit

Direct materials $30.00

Direct labor 20.00

Variable manufacturing overhead 15.00

Fixed manufacturing overhead 25.00

unit cost $90.00

Assume that Austin Widgets has sufficient capacity to fill the order without harming normal production and sales.

a. If Austin Widgets accepts the order, what effect will the order have on the company's short-term profit?Give the dollar amount of increase or decreaseand show calculations.

b. What minimum price should Austin Widgets charge to achieve a $25,000 incremental profit? Show calculations.

c. Now assume Austin Widgets is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Austin Widgets accepts the order, what effect will the order have on the company's short-term profit?Give the dollar amount of increase or decreaseand show calculations.

Thank you