The Brady Corporation sells 250,000 V262 valves to the automobile and truck industry. Brady has a capacity of 150,000 machine-hours and can produce 2 valves permachine-hour. V262's contribution margin per unit is $8. Brady sells only 250,000 valves because 50,000 valves (20% of the good valves) need to be reworked. It takes onemachine-hour to rework 2 valves, so 25,000 hours of capacity are used in the rework process. Bradys rework costs are $350,000. Rework costs consist of thefollowing:

Direct materials and direct rework labor (variable costs): $2 per unit
Fixed costs of equipment, rent, and overhead allocation: $5 per unit

Bradys process designers have developed a modification that would maintain the speed of the process and ensure 100% quality and no rework. The new process would cost $480,000 per year. The following additional information is available:

The demand for Brady's V262 valves is 390,000 per year.
The Tristan Corporation has asked Brady to supply 24,000 T971 valves (another product) if Brady implements the new design. The contribution margin per T971 valve is $11. Brady can make one T971 valve permachine-hour with 100% quality and no rework.

REQUIRED

1. Suppose Brady's designers implementthe new design. Should Brady accept Tristan's order for 24,000 T971 valves? Show your calculations.
2. Should Brady implement the new design? Show your calculations.
3. What nonfinancial and qualitative factors should Brady consider in deciding whether to implement the new design?