The award Plus Company manufactures windows. Its manufacturing plant has the capacity to produce 6,000 windows each month. Current production and sales are 5,000 windows per month. The company normally charges $200 per window..

Variable costs that vary with number of units produced

Direct materials $150,000

Direct manufacturing labor 75,000

Variable costs (for setups, materials handling, quality control, and so on)

that vary with number of batches, 200 batches $1,000 per batch 200,000

Fixed manufacturing costs 100,000

Fixed marketing costs 25,000

Total costs $550,000

Award Plus has just received a special one-time-only order for 1,000 windows at $175 per window. Accepting the special order would not affect the company's regular business or its fixed costs. Award Plus makes windows for its existing customers in batch sizes of 25 windows (200 batches 25 windows per batch = 5,000 windows). The special order requires Award Plus to make the windows in 10 batches of 100 windows.

Requirement 3. As in requirement 1, assume that monthly capacity is 6,000 windows. Award Plus is concerned that if it accepts the special order, its existing customers will immediately demand a price discount of $5 in the month in which the special order is being filled. They would argue that Award Plus's capacity costs are now being spread over more units and that existing customers should get the benefit of these lower costs. Should Award Plus accept the special order under these conditions? Show your calculations.

1.Select the labels and then enter the amounts to calculate the net effect on operating income from accepting the special order under this scenario. (Use a minus sign or parentheses to show a net decrease in operating income from accepting the special order. Abbreviations used: Operating income = OI; Special order = SO.)

__________________-_________________________________________= Net increase (decrease)

__________________-_________________________________________=___________________

Please help me with Requirement #3, I dont understand that part. Please give me detailed instruction. Please help

1. Should Award Plus accept this special order? Show your calculations.

2.Suppose plant capacity were only 5,500 windows instead of 6,000 windows each month. The special order must either be taken

in full or be rejected completely. Should Award Plus accept the special order? Show your calculations.

3.As in requirement 1, assume that monthly capacity is 6,000 windows. Award Plus is concerned that if it accepts the special order, its existing customers will immediately demand a price discount of $5 in the month in which the special order is being filled. They would argue thatAward Plus's capacity costs are now being spread over more units and that existing customers should get the benefit of these lower costs. Should Award Plus accept the special order under these conditions? Show your calculations.