Hi$-$Tech is the creator of Y$-$Go$,$ a technology that weaves silver into the fabric to kill bacteria and odour on clothing while managing heat. Y$-$GO has become very popular in undergarments for sports activities. Operating at capacity, Hi$-$Tech can produce $500,000$ undergarments each year. The normal selling price is $$10$ per unit. The per unit cost for each unit is as follows:

Per unit

Direct materials $$2\mathrm{.}00$

Direct labour $0\mathrm{.}50$

Variable manufacturing overhead $1\mathrm{.}00$

Fixed manufacturing overhead $1\mathrm{.}25$

Variable selling expenses $0\mathrm{.}25$

The Canadian armed forces $($CAF$)$ has approached Hi Tech and expressed an interest in purchasing $75,000$ Y$-$GO undergarments for soldiers stationed in hot climates.

Required:

To answer a$,$ b$,$ and c$,$ use the minimum price model:

Minimum price model

Variable cost XX

Plus: Lost CM on regular sales XX

Equals Total minimum price $($TMP$)$ XX

Unit price $($TMP$/$ units in special order$)$

a$)$ If Hi$-$Tech is operating at $100\%$ capacity what is the minimum price to charge?

b$)$ If Hi$-$ Tech is operating at $90\%$ capacity what is the minimum price to charge?

c$)$ If Hi$-$Tech is operating at $70\%$ capacity what is the minimum price to charge?

d$)$ Assume High Tech is operating at $90\%$ capacity and Hi$-$tech receives a special order from the CAF for $75,000$ Y$-$Gos at a selling price of $$8\mathrm{.}00$ per unit. Compute the increase in profit $($or loss$)$ if High Tech accepts the order.