1) If Capitol accepts the order, what effect will the order have on the companys short-term profit? Will it increase or decrease? By how much?

2) What minimum price should Capitol charge to achieve a $45,000 incremental profit?

3) Now assume Capitol is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Capitol accepts the order, what effect will the order have on the companys short-term profit? Will profits increase or decrease?

Capitol has received a special order for 2,160 units of its product at a special price of $155. The product normally sells for $216 and has the following manufacturing costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Per unit $ 55 35 25 45 160 Unit cost Assume that Capitol has sufficient capacity to fill the order without harming normal production and sales and all fixed overhead is unavoidable