Rowe Tool and Die $($RTD$)$ produces metal fittings as a supplier to various manufacturing firms in the area. The following is the

forecasted income statement for the next quarter, which is the typical planning horizon used at RTD$.$ RTD expects to sell $45,000$ units

during the quarter. RTD carries no inventories.

Fixed costs included in this income statement are $$292,500$ for depreciation on plant and machinery and miscellaneous factory

operations and $$94,500$ for administrative costs. RTD has received a request for $10,000$ fittings to be produced in the next quarter

from Endicott Manufacturing. Endicott has never purchased from RTD$,$ although they have been a local company for many years.

Endicott has offered to pay $$20$ per unit. RTD can easily produce the $10,000$ units with its existing capacity. Production of the $10,000$

units will incur all variable manufacturing costs but no fixed manufacturing costs. No administrative costs will be incurred because of

the order.

Requlred:

a$.$ What impact would accepting this special order have on operating profit?

b$.$ Should RTD accept the order?

Complete this question by entering your answers in the tabs below.

Required A$.$

What impact would accepting this special order have on operating profit?

Note: Enter your answers in thousands rounded to $1$ decimal place. $($i$.$e$.,5,400,400$ should be entered as $5,400\mathrm{.}4).$ Select

option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.

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