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

Boniatillo 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 Cost of goods sold Gross profit Selling and administrative Net income $30,000 27,000 $ 3,000 2,500 $ 500 There were no beginning or ending inventories of work-in-process or finished goods. Boniatillo's manufacturing costs were as follows: Direct materials (1,200 units x $5) Direct labor (1,200 units x $8) Variable overhead (1,200 units x $4.50) Fixed overhead Total $ 6,000 9,600 5,400 6,000 $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 fixed. Boniatillo has just received a special order from a firm in China to purchase 900 units at $20 each. The order will not affect the selling price to regular customers but requires additional fixed 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. Determine the net advantage or disadvantage (profit increase or decrease) of accepting the order, assuming Boniatillo does not have excess capacity. Indicate if Boniatillo should accept or reject the special order. 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 rate Appendix A: Present Value Tables Present Value of $1 Periods 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 1 0.980 0.962 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.820 2 0.961 0.925 0.890 0.857 0.826 0.797 0.769 0.743 0.718 0.694 0.672 3 0.942 0.889 0.840 0.794 0.751 0.712 0.675 0.641 0.609 0.579 0.551 4 0.924 0.855 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.482 0.451 5 0.906 0.822 0.747 0.681 0.621 0.567 0.519 0.476 0.437 0.402 0.370 6 0.888 0.790 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 0.303 7 0.871 0.760 0.665 0.583 0.513 0.452 0.400 0.354 0.314 0.279 0.249 8 0.853 0.731 0.627 0.540 0.467 0.404 0.351 0.305 0.266 0.233 0.204 9 0.837 0.703 0.592 0.500 0.424 0.361 0.308 0.263 0.225 0.194 0.167 10 0.820 0.676 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 0.137 11 0.804 0.650 0.527 0.429 0.350 0.287 0.237 0.195 0.162 0.135 0.112 12 0.788 0.625 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 0.092 13 0.773 0.601 0.469 0.368 0.290 0.229 0.182 0.145 0.116 0.093 0.075 14 0.758 0.577 0.442 0.340 0.263 0.205 0.160 0.125 0.099 0.078 0.062 15 0.743 0.555 0.417 0.315 0.2390.183 0.140 0.108 0.084 0.065 0.051 16 0.728 0.534 0.394 0.292 0.218 0.163 0.123 0.093 0.071 0.054 0.042 17 0.714 0.513 0.371 0.270 0.1980.146 0.108 0.080 0.060 0.045 0.034 18 0.700 0.494 0.350 0.250 0.180 0.130 0.095 0.069 0.051 0.038 0.028 19 0.686 0.475 0.331 0.232 0.164 0.116 0.083 0.060 0.043 0.031 0.023 20 0.673 0.456 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 0.019 21 0.660 0.439 0.294 0.199 0.135 0.093 0.064 0.044 0.031 0.022 0.015 22 0.647 0.422 0.278 0.184 0.123 0.083 0.056 0.038 0.026 0.018 0.013 23 0.634 0.406 0.262 0.170 0.112 0.074 0.049 0.033 0.022 0.015 0.010 24 0.622 0.390 0.247 0.158 0.102 0.066 0.043 0.028 0.019 0.013 0.008 25 0.610 0.375 0.233 0.146 0.092 0.059 0.038 0.024 0.016 0.010 0.007 26 0.598 0.361 0.220 0.135 0.084 0.053 0.033 0.021 0.014 0.0090.006 27 0.586 0.347 0.207 0.125 0.076 0.047 0.029 0.018 0.011 0.007 0.005 28 0.574 0.333 0.196 0.116 0.069 0.042 0.026 0.016 0.010 0.006 0.004 29 0.563 0.321 0.185 0.107 0.063 0.037 0.022 0.014 0.008 0.005 0.003 30 0.552 0.308 0.174 0.099 0.057 0.033 0.020 0.012 0.007 0.004 0.003 24% 26% 0.806 0.794 0.650 0.630 0.524 0.500 0.423 0.397 0.341 0.315 0.275 0.250 0.222 0.198 0.179 0.157 0.144 0.125 0.116 0.099 0.094 0.079 0.076 0.062 0.061 0.050 0.049 0.039 0.040 0.031 0.032 0.025 0.026 0.020 0.021 0.016 0.017 0.012 0.014 0.010 0.011 0.008 0.009 0.006 0.007 0.005 0.006 0.004 0.005 0.003 0.004 0.002 0.003 0.002 0.002 0.002 0.002 0.001 0.002 0.001 28% 30% 32% 40% 0.781 0.769 0.758 0.714 0.610 0.592 0.574 0.510 0.477 0.455 0.435 0.364 0.373 0.350 0.329 0.260 0.291 0.269 0.250 0.186 0.227 0.207 0.189 0.133 0.178 0.159 0.143 0.095 0.139 0.123 0.108 0.068 0.108 0.094 0.082 0.048 0.085 0.073 0.062 0.035 0.066 0.056 0.047 0.025 0.052 0.043 0.036 0.018 0.040 0.033 0.027 0.013 0.032 0.025 0.021 0.009 0.025 0.0200.016 0.006 0.019 0.015 0.012 0.005 0.015 0.012 0.0090.003 0.012 0.0090.007 0.002 0.009 0.007 0.005 0.002 0.007 0.005 0.004 0.001 0.006 0.004 0.003 0.001 0.004 0.003 0.002 0.001 0.003 0.002 0.002 0.000 0.003 0.002 0.001 0.000 0.002 0.001 0.001 0.000 0.002 0.001 0.001 0.000 0.001 0.001 0.001 0.000 0.001 0.001 0.000 0.000 0.001 0.000 0.000 0.000 0.001 0.000 0.000 0.000 Present Value of an Annuity of $1 in Arrears Periods 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% 32% 40% 1 0.980 0.962 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.820 0.806 0.794 0.781 0.769 0.758 0.714 2 1.942 1.886 1.833 1.783 1.736 1.690 1.647 1.605 1.566 1.528 1.492 1.457 1.424 1.392 1.361 1.331 1.224 3 2.884 2.775 2.6732.577 2.487 2.402 2.322 2.246 2.174 2.106 2.042 1.981 1.923 1.868 1.816 1.766 1.589 4 3.808 3.630 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 2.494 2.404 2.320 2.241 2.166 2.096 1.849 5 4.713 4.452 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 2.864 2.745 2.635 2.532 2.436 2.345 2.035 6 5.601 5.2424.917 4.623 4.355 4.111 3.889 3.685 3.498 3.326 3.167 3.020 2.885 2.759 2.643 2.534 2.168 7 6.472 6.002 5.582 5.206 4.868 4.564 4.288 4.039 3.812 3.605 3.416 3.242 3.083 2.937 2.802 2.677 2.263 8 7.325 6.733 6.210 5.747 5.335 4.968 4.639 4.344 4.078 3.837 3.619 3.421 3.241 3.076 2.925 2.786 2.331 9 8.162 7.435 6.802 6.247 5.759 5.328 4.946 4.607 4.303 4.031 3.786 3.566 3.366 3.184 3.019 2.868 2.379 10 8.983 8.111 7.360 6.710 6.145 5.650 5.216 4.833 4.494 4.192 3.923 3.682 3.465 3.269 3.092 2.930 2.414 11 9.787 8.760 7.887 7.139 6.495 5.938 5.453 5.029 4.656 4.327 4.035 3.776 3.543 3.335 3.147 2.978 2.438 12 10.575 9.3858.384 7.536 6.814 6.194 5.660 5.197 4.793 4.439 4.127 3.851 3.606 3.387 3.190 3.013 2.456 13 11.348 9.986 8.853 7.904 7.103 6.424 5.842 5.342 4.910 4.533 4.203 3.912 3.656 3.427 3.223 3.040 2.469 14 12.106 10.563 9.295 8.244 7.367 6.628 6.002 5.468 5.008 4.611 4.265 3.962 3.695 3.459 3.249 3.061 2.478 15 12.849 11.118 9.712 8.559 7.606 6.811 6.142 5.575 5.092 4.675 4.315 4.001 3.726 3.483 3.268 3.076 2.484 16 13.578 11.652 10.106 8.851 7.824 6.974 6.265 5.668 5.162 4.730 4.357 4.033 3.751 3.503 3.283 3.088 2.489 17 14.292 12.166 10.477 9.122 8.022 7.120 6.373 5.749 5.222 4.775 4.391 4.059 3.771 3.518 3.295 3.097 2.492 18 14.992 12.659 10.828 9.372 8.201 7.250 6.467 5.818 5.273 4.812 4.419 4.080 3.786 3.529 3.304 3.104 2.494 19 15.678 13.134 11.158 9.604 8.365 7.366 6.550 5.877 5.316 4.843 4.442 4.097 3.799 3.539 3.311 3.109 2.496 20 16.351 13.590 11.470 9.818 8.514 7.469 6.623 5.929 5.353 4.870 4.460 4.110 3.808 3.546 3.316 3.113 2.497 21 17.011 14.029 11.764 10.017 8.649 7.562 6.687 5.973 5.384 4.891 4.476 4.121 3.816 3.551 3.320 3.116 2.498 22 17.658 14.451 12.042 10.201 8.772 7.645 6.743 6.011 5.410 4.909 4.488 4.130 3.822 3.556 3.323 3.118 2.498 23 18.292 14.857 12.303 10.371 8.883 7.718 6.792 6.044 5.432 4.925 4.499 4.137 3.827 3.559 3.325 3.120 2.499 24 18.914 15.247 12.550 10.529 8.985 7.784 6.835 6.073 5.451 4.937 4.507 4.143 3.831 3.562 3.327 3.121 2.499 25 19.523 15.622 12.783 10.675 9.077 7.843 6.873 6.097 5.467 4.948 4.514 4.147 3.834 3.564 3.329 3.122 2.499 26 20.121 15.983 13.003 10.810 9.161 7.896 6.906 6.118 5.480 4.956 4.520 4.151 3.837 3.566 3.330 3.123 2.500 27 20.707 16.330 13.211 10.935 9.237 7.943 6.935 6.136 5.492 4.964 4.524 4.154 3.839 3.567 3.331 3.123 2.500 28 21.281 16.663 13.406 11.051 9.307 7.984 6.961 6.152 5.502 4.970 4.528 4.157 3.840 3.568 3.331 3.124 2.500 29 21.844 16.984 13.591 11.158 9.370 8.022 6.983 6.166 5.510 4.975 4.531 4.159 3.841 3.569 3.332 3.124 2.500 30 22.396 17.292 13.765 11.258 9.427 8.055 7.003 6.177 5.517 4.979 4.534 4.160 3.842 3.569 3.332 3.124 2.500