The Lady Whistledown Co. manufactures a high end pen and ink set. The Ultra Quill model has the following full unit costs for 5,000 units:
Direct materials	$25
Direct labor	10
Manufacturing overhead (60% variable)	24
Selling expenses (40% variable)	14
Administrative expenses (10% variable)	5
Total per unit	$78
Penelope Featherington recently approached The Lady Whistledown with a special order to purchase 1,000 units for $60. The Lady Whistledown currently sell the model to consumers for $100. Capacity is sufficient to produce the extra 1,000 units. Variable selling expenses will be incurred on the special order.
REQUIRED
1. Ignoring the special order, design a contribution margin income statement that shows the operating profit of the 5,000 units The Lady Whistledown currently sells.
2. Determine the impact on profit of accepting the order. Should The Lady Whistledown accept the special order?
3. Determine the minimum price The Lady Whistledown would need on the special order so that before tax profits for the company would increase by $25,000 (over their current profit calculated in #1).