The Immanuel Company has the capacity to produce 75,000 bins per month. Fixed production costs are $120,000 per month, and the company currently sells 70,000 bins at $13 each based on the following unit costs:

-        Variable production cost      $5.60

-        Fixed production costs           1.60[Based on capacity]

-       Variable selling expense        1.00

The Immanuel Co has just obtained a request for a special order of 6,000 bins to be shipped at the end of the month at a selling price of $10 each. The price and the terms are open to negotiation. If the special order is accepted, the company will avoid the selling expenses, but shipping costs of $0.30 per unit will have to be added.

Required:

1 List 5 non-financial/financial issues that should be considered before accepting or rejecting this order. Should they accept the order? With what conditions?

2 If Immanuel accepts the special order  as is, what will be the increase in monthly net operating income?

3 What is the lowest price Immanuel should accept on this special order without losing money

4 If Immanuel had regular sales of 71,000 bins per month, what would be the change in monthly operating income if it accepted the special order?