Nardin Outfitters has a capacity to produce 12,500 of their special arctic tents per year. The company is currently producing and selling 5,000 tents per year at a selling price of $950 per tent. The cost of producing and selling one tent follows:

Variable manufacturing costs$ 450Fixed manufacturing costs95Variable selling and administrative costs85Fixed selling and administrative costs55Total costs$ 685

The company has received a special order for 600 tents at a price of $610 per tent from Chipman Outdoor Center. It will not have to pay any sales commission on the special order, so the variable selling and administrative costs would be only $46 per tent. The special order would have no effect on total fixed costs. The company has rejected the offer based on the following computations:

Selling price per case$ 610Variable manufacturing costs450Fixed manufacturing costs95Variable selling and administrative costs46Fixed selling and administrative costs55Net profit (loss) per case$ (36)

Required:

a. What is the impact on profit for the year if Nardin Outfitters accepts the special order?

b. Do you agree with the decision to reject the special order?