I 4. Poppy Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 30,000 Rets per year; however, due to a recession, Poppy Company is currently selling only 25,000 Rets. Costs associated 25,000 Rets are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit $15.0 8.0 3.0 10.8 Total $375,000 200,000 75,000 270,000 The Rets normally sell for $50 each. Total fixed manufacturing overhead is constant at $270,000. A large retail chain has offered to purchase 5,000 Rets at $42 per unit. Moreover, the customer requests a small change to be made to Rets, which will increase $1 per unit for the Direct labor cost. Since this product specification is somewhat different from Poppy's normal product, to ensure the product quality, Poppy needs to lease a special inspection machine during the production process. The lease cost of the machine is $37,000, and the machine will not be used for any other purposes. Required: If Poppy accepts the special order, by how much will the company's Net Income increase or decrease? Should Poppy accept or reject the special order? (Accept. NI will increase by $38,000)

4. Poppy Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 30,000 Rets per year; however, due to a recession, Poppy Company is currently selling only 25,000 Rets. Costs associated 25,000 Rets are given below: The Rets normally sell for \\( \\$ 50 \\) each. Total fixed manufacturing overhead is constant at \\( \\$ 270,000 \\). A large retail chain has offered to purchase 5,000 Rets at \\( \\$ 42 \\) per unit. Moreover, the customer requests a small change to be made to Rets, which will increase \\( \\$ 1 \\) per unit for the Direct labor cost. Since this product specification is somewhat different from Poppy's normal product, to ensure the product quality. Poppy needs to lease a special inspection machine during the production process. The lease cost of the machine is \\( \\$ 37,000 \\), and the machine will not be used for any other purposes. Required: If Poppy accepts the special order, by how much will the company's Net Income increase or decrease? Should Poppy accept or reject the special order? (Accept. NI will increase by \\( \\$ 38,000 \\) )