Special Order William A. Smith Pest Control, Inc. (WASP) currently provides pest control services to households in the local community. WASP has an opportunity to service 250 customers of another pest control firm that has also been selling in the community. WASP has the capacity to service 1,000 homes. WASP has an effective income tax rate of 30%. WASP's income statement, before consideration of the new opportunity, is as follows. Sales (750 homes at $320 per home) $240,000 Variable service costs 145,500 Contribution margin 94,500 30,000 Operating income 64,500 19,350 $45,150 Fixed service costs Income taxes Net income In negotiating a price for the special opportunity, at what amount should WASP set the minimum per-home price? $ minimum per-home price Special Order Plastic Pipe Company manufactures a variety of pipes, and has received a special one-time-only order from a new customer. Plastic Pipe has sufficient idle capacity to accept the special order to manufacture 1,400 16-foot lengths of pipe at a price of $9.00 per pipe. Plastic Pipe's normal selling price is $12.00 per 16-foot length. Variable manufacturing costs are $7.00 per pipe and fixed manufacturing costs are $1.00 per pipe. Plastic Pipes variable selling expense for its normal line of pipes is $0.50 per pipe. What would the effect on Plastic Pipe's operating income be if the company accepted the special order? Plastic Pipe's operating income would * by $ if the order was accepted. Which of the following best explains a "step costs"? Select one: A. Costs that are fixed overall, but variable within a relevant range B. Costs that change proportionally with changes in production C. Costs that increase disproportionately at higher levels of demand D. Costs that are fixed within a relevant range but change at certain thresholds O E. None of the above When a company has high operating leverage: Select one: A. It has low fixed costs. B. It borrows to cover most costs. O C. It has high fixed costs relative to variable costs. O D. It has high variable costs relative to fixed costs. O E. None of the above