Stahlbush Island Farms grows organic vegetables and sells them to local restaurants after processing. The farm$$s leading product is Salad$-$Delight$,$ which is a mixture of organic green salad ingredients prepared and ready to serve.

Salad$-$Delight$$ Current Revenue & Cost Structure

Unit $($bag$)$ Selling Price $$30\mathrm{.}75$

Variable Cost per unit $$20\mathrm{.}70($$$1\mathrm{.}25$ delivery charge included$)$

Average Total Cost per unit $$25\mathrm{.}25$

Because the vegetables are perishable and Stahlbush Island Farms is experiencing a large crop, the farm has extra capacity. A representative of a restaurant association in another city has offered to buy fresh salad stock from the company to supplement its regular supply during an upcoming 'foodie' festival. The restaurant association wants to buy $2,500$ bags for the festival at a price of $$23\mathrm{.}55$ per bag. Delivery of this special order to the festival is estimated to cost Stahlbush Island Farms $$2,200$ in total. It can meet most of the order with excess capacity but would sacrifice $925$ bags of regular sales to fill this special order.

Karla is the owner of Stahlbush Island Farms and needs help in making the decision. As Salad$-$Delight$$ is a mixed ingredient offering, she has $$mixed$$ feelings about accepting the order. What conclusion $($accept or not accept$)$ does a financial $($differential$)$ analysis suggest in the scenario above?

What non$-$quantitative issues should management consider before making a final decision for these special orders?

Comment on Karla's modification to the scenario as specified below. Show a differential analysis of accepting the special order. This analysis must include the increase$/($decrease$)$ in profit$/($loss$)$ of accepting the special order. Karla has asked for a modification to the scenario above, and that is$,$ how would your analysis change if the special order were for $2,500$ bags per month for the next five years with no loss of regular sales? What is your recommendation? $($Show a differential analysis with comments.$)$