I am working on a Cost Accounting Demonstration Problem.

The first photo is the problem The second photo is the answer and I am having trouble figuring out the starred answer. No way I work the Variable Cost, I cannot see how they came up with $1521000. I don't know what I am missing.

Demonstration Problem 2 Nationwide Windows can produce 10,000 windows per year. Its normal year of operations involves the following: $1,760,000 Sales (8,000 units @ $220) Manufacturing cost Variable per unit Fixed Selling and administrative cost Variable (commission) per unit on sales Fixed 150 260,000 12 60,000 During the year, Nationwide is approached by a contractor to buy 1,500 windows for $165 each. The variable sales commission is set to be a flat fee of $12,000 for the special order. The fixed costs are not affected by the decision. Required: 1. Should Nationwide Windows accept or reject the special order for 1,500 windows at $165 each? Why? 2. Assume, instead, that the contractor needs a total of 2,500 windows, all other information remains the same. Should Nationwide accept or reject the special order for 2,500 windows at $165? Why? Demonstration Problem 2-Solution Part 1 The special order for 1,500 windows at $165 each should be accepted because it generates the additional profit of $10,500. Sales Variable costs Contribution margin Fixed costs Operating profit Status Quo: Reject Special Order $ 1,760,000 (1.296,000 $464,000 (320,000) $ 144,000 Alternative: Accept Special Order $2,007,500 a (1,521,000 b $486,500 (332,000) C $ 154,500 Difference $ 247,500 (225,000) $22,500 (12,000) $ 10,500 a $220 x 7,500+ $165 x 1,500 = $2,007,500 Ab$162 x 7,500 + $150 x 1,500 = $1,521,000 $260,000+ $60,000+ $12,000 = $332,000 Part 2 Nationwide Windows can produce 10,000 windows per year. It is currently selling 8,000 windows per year. It only has the capacity to make an additional 2,000 windows per year. As such, if the special order of 2,500 windows at $165 each is accepted, Nationwide would only be able to sell 7,500 windows (instead of 8,000 windows) at its regular price of $220 each. The snecial order of 2.500 windows at $165 each should be rejected because it generates a net