John's Wine produces premium wine. Its success in the industry is due to its quality, although all of its customers, wine shops and specialty grocery stores, are very cost conscious and negotiate for price cuts on all large orders. Noting that the wine industry is becoming increasingly competitive, John's is looking for a way to meet the challenge. It is negotiating with Shopper's Club, a regional specialty grocery store, to purchase a large order of wine. John's is currently producing at under-capacity and would like to keep its production facilities, gaining better economies of scale by increasing production. Shopper's Club has agreed to a large order but only at a price of $31 per bottle. The special order can be purchased in one batch with available capacity. John's prepared these data: Next month's operating information (per unit, for 10,000 bottles, made in 10 batches of 1,000 each):

Sales Price $45

Per Unit costs:

Variable manufacturing costs 16

Batch level costs 4

Variable marketing costs 9

Fixed manufacturing costs 6

Fixed marketing costs 1

Special order information order is produced in one batch

Sales units 2,000

Sales price per bottle $31

No variable marketing costs are associated with this order, but John's has spent $2,500 during the past two months trying to get Shopper's Club to purchase the special order. Solve: 1) How much will the special order change John's total operating income? 2) How much would the special order change Johns's total operating income if John's is operating at full capacity and would lose the sale of the 2,000 bottles to regular customers? 3) How might the special order fit into John's competitive strategy?