Sato Awards has had a request for a speclal order of $10$ silver$-$plated trophles from the provinclal tennls assoclation. The

normal selling price of such a trophy is $$390\mathrm{.}00$ and its unit product cost is $$260\mathrm{.}00,$ as shown below:

Direct materials $$139\mathrm{.}00$

Direct labourra

Manufacturing overhead $35\mathrm{.}0$

Unit product cost $$26.$

Most of the manufacturing overhead is fixed and unaffected by varlations in how many trophles are produced in any given

perlod. However, $$7$ of the overhead is varlable, depending on the number of trophles produced. The customer would like a

special logo applied to the trophles requiring additional materlals costing $$6$ per trophy and would also require acquisition of a

special tool costing $$495$ that would have no other use once the special order was completed. This order would have no

effect on the company's regular sales, and the order could be filled using the company's existing capacity without affecting any

other order.

Required:

a$.$ What effect would accepting this order have on the company's operating income if a special price of $$345\mathrm{.}00$ is offered per

trophy for this order? $($Do not round Intermedlate calculatlons. Round your answer to $2$ decimal places.$)$

Net operating income

b$.$ Should the speclal order be accepted at this price?

Yes

No