Ronex Corporation manufactures leather seats and sells each seat for $500. The cost to manufacture 29,000 seats is as follows: Direct Materials: $2,600,000 Direct Labour: $1,100,000 Variable Overhead: $1,800,000 Fixed Costs: $ 575,000 The company paid $200,000 to upgrade their production equipment last year. The company is not operating at full capacity and has been approached by a customer who would like to purchase a special order of 6,000 seats for $250 each.

If the company accepts the special order, it will likely result in them being able to bring in an extra $20,000 of extra revenue that year from selling additional accessory products to this customer. Required (8 marks) a)incremental analysis for this situation b) Should the company accept the special order, why or why not?