George Jack operates a small machine shop. He manufactures one standard product available from other similar businesses, and he also manufactures products to customer order. His accountant prepared the annual income statement shown below:

The depreciation charges are for machines. The power charge is apportioned based on estimated power consumed. The rent is for the building space that has been leased for 10 years at $14,000 per year. The rent and heat and light are apportioned to the product lines based on amount of floor space occupied. All other costs are current expenses identified with the product line causing them.
A valued custom parts customer has asked Mr. Jack if he would manufacture 5,000 special units for him. Mr. Jack is working at capacity and would have to give up some other business in order to take this business. He can't renege on customer orders already agreed to, but he could reduce the output of his standard product by about one-half for one year while producing the specially requested custom part. The customer is willing to pay $ 16.00 for each part. The material cost will be about $4.50 per unit and the labor will be $8.00 per unit. Mr. Jack will have to spend $4,500 for a special device that will be discarded when the job is done.
Required:
a. Calculate the following costs related to the 5,000-unit custom order.
(1) The differential cost of the order.
(2) The full cost of the order.
(3) The opportunity cost of taking the order.
(4) The sunk costs related to the order.
b. Should Mr. Jack take the order? Explain your answer.

Custom Standard Sales Sales Total Sales Material Labor Depreciation Power Rent Heat and light Other $100,000 20,000 40,000 12,600 1,400 12,000 1,200 800 88,000 $ 12,000 $50,000 16,000 18,000 7,200 $150,000 36,000 58,000 19,800 2,200 14,000 1,400 2,600 134,000 5 16,000 800 2,000 200 1,800 46,000 4,000