In the Whine Company, it costs $30 per unit ($20 variable and $10 fixed) to make a product that normally sells for $55. A foreign wholesaler offers to buy 3000 units at $35 each. The Whine Company will incur special shipping costs of $2 per unit.

Required:

1. Assuming that the Whine Company has excess operating capacity, What is the impact on profit for the year if Whine Company accepts the special order? Show computations.. (8 marks)
2. Do you agree with the decision to reject the special order? Explain. (7 marks)