The Delmar Beverage Company produces a premium root beer that is sold throughout its chain of restaurants in the Midwest. The

company is currently producing $4,000$ gallons of root beer per day, which represents $80\%$ of its manufacturing capacity. The root beer

is available to restaurant customers by the mug, in bottles, or packaged in six$-$packs to take home. The selling price of a gallon of root

beer averages $$10,$ and cost accounting records indicate the following manufacturing costs per gallon of root beer:

In addition to the manufacturing costs just described, Delmar Beverage incurs an average cost of $$0\mathrm{.}50$ per gallon to distribute the

root beer to its restaurants.

SaveMore Incorporated, a chain of grocery stores, is interested in selling the premium root beer in gallon jugs throughout its stores in

the St$.$ Louis area during holiday periods and has offered to purchase root beer from Delmar Beverage at a price of $$7\mathrm{.}70$ per gallon.

SaveMore believes it could sell $600$ gallons per day. If Delmar Beverage agrees to sell root beer to SaveMore, it estimates the average

distribution cost will be $$0\mathrm{.}70$ per gallon.

Required:

a$.$ Identify all the relevant costs that Delmar Beverage should consider in evaluating the special sales order from SaveMore?

b$.$ How would Delmar Beverage's daily operating income be affected by the acceptance of this offer?

c$.$ Assume that Delmar Beverage is currently producing $5,000$ gallons of root beer daily.

Identify all the relevant costs that Delmar Beverage should consider in evaluating the special sales order from SaveMore?

How would Delmar Beverage's daily operating income be affected by the acceptance of this offer?

Identify all the relevant costs that Delmar Beverage should consider in evaluating the special sales order from SaveMore?

Note: Round your answers to $2$ decimal places.