Santana & Co produces widgets. They have a capacity to produce 50,000 widgets/year and currently sell 45,000 widgets/year. They sell these widgets for $200. Each widget costs Santana & Co $80 to make. Their fixed costs are $900,000/year.

Penultimo LLC Have approached Santana & Co and want to order 8,000 widgets. They have offered to buy them for $150 each, however have requested customizations which will increase variable costs by $10/widget. Santana will also need to purchase a new engraving machine costing $30,000 to perform the requested customizations.

a)If Santana & Co accept this special order, what will be the profit/loss from the order?

b)If Penultimo LLC wanted to order 11,000 widgets, what will be the profit/loss from the order?