Bueno Manufacturing has received an offer from Chido Corp. to purchase $2,000$ units of

its standard product at a price of $$39$ per unit.

Bueno$$s current production and sales is as follows:

Units produced & sold annually $10,000$

Unit production capacity $14,000$

Per unit

Regular sales price $ $55\mathrm{.}00$

Direct Materials $20\mathrm{.}00$

Direct Labor $10\mathrm{.}00$

Variable Overhead $6\mathrm{.}00$

Fixed Overhead $2\mathrm{.}00$

a$.$ What is the short$-$term change in Operating Income if Chido$$s special offer is accepted?

b$.$ Suppose that Bueno is operating at full capacity producing and selling $14,000$ units per year. What

is the Opportunity Cost if Chido$$s special offer is accepted?

c$.$ What non$-$financial factors should Bueno consider in deciding whether to accept$/$reject Chido$$s

offer?