Special$-$Order Decision

Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase $15,000$ units at a per$-$unit price of $$10\mathrm{.}00.$ The new customer is geographically separated from Smooth Move's other customers, and existing sales will not be affected. Smooth Move normally produces $83,000$ units but plans to produce and sell only $65,000$ in the coming year. The normal sales price is $$15$ per unit. Unit cost information is as follows:

Direct materials $$3\mathrm{.}10$

Direct labor $2\mathrm{.}50$

Variable overhead $1\mathrm{.}15$

Fixed overhead $1\mathrm{.}80$

Total $$8\mathrm{.}55$

If Smooth Move accepts the order, no fixed manufacturing activities will be affected because there is sufficient excess capacity.

Required:

$1.$ What are the alternatives for Smooth Move?

$2.$ CONCEPTUAL CONNECTION: Should Smooth Move accept the special order?

By how much will profit increase or decrease if the order is accepted?

$fill in the blank $4$

$3.$ CONCEPTUAL CONNECTION: Briefly explain the significance of the statement in the exercise that $$existing sales will not be affected$($by the special sale$).$