Questions 4 and 5 refer to the following problem:

At the end of the year, a company offered to buy 4,400 units of a product from X Company for $12.00 each instead of the company's regular price of $17.00 each. The following income statement is for the 62,100 units of the product that X Company has already made and sold to its regular customers:

Sales		$1,055,700
Cost of goods sold		517,914
Gross margin		$537,786
Selling and administrative costs		168,912
Profit		$368,874

For the year, variable cost of goods sold were $398,061, and variable selling and administrative costs were $86,940. The special order product has some unique features that will require additional material costs of $0.87 per unit and the rental of special equipment for $2,000. 1. Profit on the special order would be how much?

2. The marketing manager thinks that if X Company accepts the special order, regular customers will be lost unless the selling price for them is reduced by $0.10. The effect of reducing the selling price will be to decrease firm profits by how much?