Manufacturing produces and sells oil filters for $3.10 each. A retailer has offered to purchase 25,000 oil filters for $1.24 per filter. Of the total manufacturing cost per filter of $2.10, $1.10 is the variable manufacturing cost per filter. For this special order, BCGelco would have to buy a special stamping machine that costs $8,000 to mark the customer's logo on the special-order oil filters. The machine would be scrapped when the special order is complete. This special order would use manufacturing capacity that would otherwise be idle. No variable nonmanufacturing costs would be incurred by the special order. Regular sales would not be affected by the special order. Would you recommend that BCGelco accept the special order under these conditions? Question content area bottom Part 1 Complete the following incremental analysis to help you make your recommendation. (Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (25,000 units) Revenue from special order $1.24 $31,000 Less variable expense associated with the order: Variable manufacturing costs 1.10 27,500 Contribution margin $0.14 $3,500 Less: Additional fixed expenses associated with the order 8,000 Increase (decrease) in operating income from the special order $(4,500) Part 2 BCGelco should accept the special sales order because it will increase operating income.

Complete the following incremental analysis to help you make your recommendation. (Use parentheses or a minus sign to indicate a decrease in operating income from the special order.)

		Total Order
Incremental Analysis of Special Sales Order Decision	Per Unit	(25,000 units)
Revenue from special order	$1.24	$31,000
Less variable expense associated with the order:
Variable manufacturing costs	1.10	27,500
Contribution margin	$0.14	$3,500
Less: Additional fixed expenses associated with the order		8,000
Increase (decrease) in operating income from the special order		$(4,500)

Part 2

BCGelco (should or should not) accept the special sales order because it will (increase or reduce) operating income.