Kitchen Co. manufactures cookware that sells for $40/set. At full capacity of 100,000 units per year, manufacturing cost is $30/set ($20 of which cost is variable). Annual SGA expenses are $500,000 ($300,000 fixed and $200,000 variable).

A catalog company offers to buy 25,000 sets from Kitchen Co for $28 per set, and notes that the order is all or nothing. No SGA costs would be caused by the order, and acceptance will not affect regular sales. However, accepting the order will trigger a one-time cost of $14,500, for making new decals etc. The manufacturing process for these sets is identical to that for the regular sets.

Required: Suppose that Kitchen Co is currently selling only 80,000 sets per year. Calculate the incremental profit or loss from accepting the offer from the catalog company. Write down incremental profit as a positive number and a incremental loss as a negative number.