Sherene Nili manages a company that produces wedding gowns. She produces both a custom product that is made to order and a standard product that is sold in bridal salons. Her accountant prepared the following forecasted income statement for March, which is a busy month:

	Custom Dresses			Standard Dresses			Total
Number of dresses		10			20			30
Sales revenue	$	54,000		$	34,000		$	88,000
Materials	$	10,800		$	8,800		$	19,600
Labor		20,800			9,800			30,600
Machine depreciation		680			380			1,060
Rent		5,000			3,600			8,600
Heat and light		1,200			800			2,000
Other production costs								3,600
Marketing and administration								8,500
Total costs							$	73,960
Operating profit							$	14,040

Ms. Nili already has orders for the 10 custom dresses reflected in the March forecasted income statement. The depreciation charges are for machines used in the respective product lines. Machines depreciate at the rate of $1 per hour based on hours used, so these are variable costs. In March, cutting and sewing machines are expected to operate for 1,060 hours, of which 680 hours will be used to make custom dresses. The rent is for the building space, which has been leased for several years at $8,600 per month. The rent, heat, and light are allocated to the product lines based on the amount of floor space occupied.

A valued customer, who is a wedding consultant, has asked Ms. Nili for a special favor. This customer has a client who wants to get married in early April. Ms. Nili's company is working at capacity and would have to give up some other business to make this dress. She can't renege on custom orders already agreed to, but she can reduce the number of standard dresses produced in March to 10. Ms. Nili would lose permanently the opportunity to make up the lost production of standard dresses because she has no unused capacity for the foreseeable future. The customer is willing to pay $28,000 for the special order. Materials and labor for the order will cost $6,800 and $10,800, respectively. The special order would require 172 hours of machine time. Ms. Nili's company would save 190 hours of machine time from the standard dress business given up. Rent, heat and light, and other production costs would not be affected by the special order.

Required:

a-1. Calculate the differential operating profit (loss). (Select option "increase" or "decrease", keeping Without special order as the base. Select "none" if there is no effect.)

	Without Special Order	With Special Order	Impact	Increase/Decrease/None
Revenue
Materials
Labor
Machine Depreciation
Contribution Margin
Rent
Heat and Light
Other Production Costs
Marketing and Admin
Operating Profti (loss)

a-2. What is the minimum price Ms. Nili should accept to take the special order?