Solomon Company manufactures and currently sells 20,000 units per year. The manufacturing cost per unit is as follows:

Direct materials ...................$10

Direct labor ...........................14

Variable overhead ..................6

Fixed overhead ......................8

Total unit cost ....................$38

Assume that the fixed overhead reflects the cost of Solomon's manufacturing facility. This facility cannot be used for any other purpose. The current selling price for regular customers is $50 per unit. An outside buyer has offered to buy 3,000 units at a special price of $32.00 per unit.

Required:

a) What is the effect on income if Solomon sells these units in the special order?

b) What is the minimum selling price that Solomon should accept in a special order?