Marcotti Cupcakes bakes and sells a basic cupcake for $1.25. The cost of producing 600,000 cupcakes in the prior year was:

At the start of the current year, Marcotti received a special order for 15,000 cupcakes to be sold for $1.10 per cupcake. To complete the order, the company must incur an additional $700 in total fixed costs to lease a special machine that will stamp the cupcakes with the customers logo. This order will not affect any of Marcottis other operations and it has excess capacity to fulfill the contract. Should the company accept the special order? What will be the change in income?

Revenues Direct materials Direct labor Manufacturing overhead (fixed) Manufacturing overhead (variable) $750,000 330,000 66,000 132,000 84,000