hom Company has just obtained a request for a special order of 12,000 units to be shipped at the end of the current year at a discount price of $7.00 each. The company has a production capacity of 90,000 units per year. At present, Thom is only selling 80,000 units per year through regular channels at a selling price of $11.00 each. Thom's per unit costs at an 80,000 unit level of production and sales are as follows:

Costs	Cost per unit
Variable production cost	$4.60
Fixed production cost	$1.80
Variable selling and administrative cost	$1.00
Fixed selling and administrative cost	$0.45

Variable selling and administrative expense will drop to $0.30 per unit on the special order units. The special order has to be taken in its entirety. This means that by accepting the special order, Thom will be forced to forego the sale of 2,000 units to its regular customers and will lose the contribution margin on those units.

How much profit will they lose from their regular orders if they accept and fill the special order?

How much profit will the make if they accept and fill the special order?

Should they accept the special order? (Yes or No)