When calculating the machine hours available for req B, you completely missed the fact that the company does not have the capacity to produce the order, and if the produce it, they will lose 1,000 hours in making their main chocolate. Max capacity = 10,000 Hours Current capacity = 7,500 Hours (0.025*300,000) =Available capacity = 2,500 Hours '-Special order = 3,500 Hours (0.05*70,000) =Hours lost if order accepted = -1,000 Using the hours lost, we realize that we will lose a CM of $ 10,000 (0.25*40,000 units given up) Therefore, we would accept the order as it will generate a profit of $27,000 as shown below. CM Gained = $49,000 (70,000*0.7) '-Machine Rent = -12,000 '-CM Lost = -10,000 Incremental Profit = $27,000 (Accept)