Lattimer Company had the following results of operations for the past year:

Sales (15,000 units at $11.95)		$179,250
Variable manufacturing costs	$96,750
Fixed manufacturing costs	20,250
Selling and administrative expenses (all fixed)	35,250	(152,250)
Operating income		$27,000

A foreign company whose sales will not affect Lattimer's market offers to buy 4,900 units at $7.40 per unit. In addition to existing costs, selling these units would add a $0.24 selling cost for export fees. If Lattimer accepts this additional business, the special order will yield a:

A. $3,479 profit. B. $8,036 loss. C. $1,960 loss. D. $4,655 profit. E. $3,136 loss.

2. Maxim manufactures a hamster food product called Green Health. Maxim currently has 10,000 bags of Green Health on hand. The variable production costs per bag are $2.50 and total fixed costs are $10,000. The hamster food can be sold as it is for $9.75 per bag or be processed further into Premium Green and Green Deluxe at an additional $2,700 cost. The additional processing will yield 10,000 bags of Premium Green and 3,700 bags of Green Deluxe, which can be sold for $8.75 and $6.75 per bag, respectively. The net advantage (incremental income) of processing Green Health further into Premium Green and Green Deluxe would be:

A. $112,475. B. $109,775. C. $14,975. D. $12,275. E. $2,700.