Using the charts and formulas provided to answer the following questions:

Formulas: Residual Income: EBIT -.(Required Rate of Return*Average Op Assets) EVA - WACC given: PAT-(WACC*Capital Employed) ROI = Margin * Turnover = EBIT/ Average Op Assets ARR = Average annual after tax accounting profit (Annual Cash flow- Depreciation)/Net Initial Investment Payback= NII/annual cash flows PAT = PBT -(PBT*TR) = PBT * (1-TR) Where: PAT= Profit after tax, PBT= Profit before tax, TR=tax rateBoniatillo Corporation, which produces one product, had the following income statement for a recent month: Boniatillo Corporation Income Statement For the Month of March 2014 Sales $30,000 Cost of goods sold 27,000 Gross prot $ 3,000 Selling and administrative 2,500 Net income $ 500 There were no beginning or ending inventories of work-inprocess or nished goods. Boniatillo's manufacturing costs were as follows: Direct materials (1,200 units x $5) $ 6,000 Direct labor (1,200 units X $8) 9,600 Variable overhead (1,200 units x $4.50) 5,400 Fixed overhead 6,000 Total $27,000 Average cost per unit $ 22.50 Selling and administrative expenses include a 5% sales commission. The remainder of the selling and admin expenses are xed. Boniatillo has just received a special order from a rm in China to purchase 900 units at $20 each. The order will not affect the selling price to regular customers but requires additional xed overhead of $1,250. Sales commission will not be paid on the special order. Required: a. Prepare a relevant cost analysis of the relevant costs and revenues associated with the decision to accept or reject the special order, assuming Boniatillo has excess capacity. Indicate if Boniatillo should accept or reject the special order. b. Determine the net advantage or disadvantage (prot increase or decrease) of accepting the order, assuming Boniatillo does not have excess capacity. Indicate if Boniatillo should accept or reject the special order