Special Order Golden Company, which manufactures robes, has enough idle capacity available to accept a special order of 10,000 robes at $16 each. A predicted income statement for the year without this special order follows: Total Per Unit $25.00 $2,500,000 12.50 3.50 16.00 Sales revenue Manufacturing costs Variable Fixed Total manufacturing costs Gross profit Marketing costs Variable Fixed Total marketing costs Operating profit 1,250,000 350,000 1,600,000 900,000 9.00 3.60 2.90 6.50 360,000 290,000 650,000 $ 250,000 $ 2.50 If the order is accepted, variable marketing costs on the special order would be reduced by 25 percent because all of the robes would be packed and shipped in one lot. However, if the offer is accepted, management estimates that it will lose the sale of 2,000 robes at regular prices. Required a. What is the net gain or loss from the special order? b. Write a brief memo to management explaining why you think the company should or should not take the special order. (CPA adapted) CS Scanned with CamScanner