The Jehan Division of a company manufactures and sells Product A. The current selling price is $73 per unit. Per-unit costs are as follows: Direct materials $ 5.00 Direct labor 6.00 Manufacturing overhead: Variable 7.00 Fixed 8.00 Selling costs: Commissions 1.00 Shipping 1.50 Fixed 1.00 $ 29.50 1. A special one-time order to purchase 20,000 units was recently received at a price of $60 per unit. There is enough capacity to fill the order and filling this order will NOT disrupt current operations. If BLUE accepts this order, variable manufacturing costs will be reduced by $5 per unit and variable selling costs (both commission and shipping) will go down by 80%. Is there an opportunity cost to BLUE, yes or no and WHY? ________ (yes or no) Should BLUE accept this order? Yes, or no and by how much? $_______________

___________________ Accept/Reject Amount of benefit