Please help, practice question for AP Finance & Accounting High School Course!

George Jeffers manages a company producing mens suits, offering both made-to-order and standard suits in retail stores. The provided table is a forecasted income statement for March. George has firm orders for the 10 custom suits indicated in the forecast. Depreciation is at $1 per machine hour used, making it a variable cost. Total machine hours for March are 900, with 600 dedicated to custom suits. The building space, rented at $7,000 per month, allocates costs based on space usage.

George faces a decision regarding a special request from a wardrobe consultant, who offers $24,000 for a suit needed in early April. Fulfilling the order would require reducing standard suit production, with a loss of future production capacity. Costs for the special order are an additional $6,000 for materials, $10,000 for labor, and 140 machine hours. Accepting the order would save 150 hours of standard suit production.

Considering this, George must ponder:

1. Should he accept the special order, and what rationale supports the decision? Show calculations

2. What minimum price should be set for the special order to remain profitable? Show work

\begin{tabular}{|c|c|c|c|} \hline & \begin{tabular}{l} Custom \\ Suits \end{tabular} & \begin{tabular}{l} Standard \\ Suits \end{tabular} & Total \\ \hline \begin{tabular}{l} Number \\ of Suits \end{tabular} & 10 & 20 & 30 \\ \hline \begin{tabular}{l} Sales \\ Revenue \end{tabular} & $50,000 & $30,000 & $80,000 \\ \hline Materials & $10,000 & $8,000 & $18,000 \\ \hline Labor & $20,000 & $9,000 & $29,000 \\ \hline \begin{tabular}{l} Machine \\ Depreciati \\ on \end{tabular} & $600 & $300 & $900 \\ \hline Rent & $4,200 & $2,800 & $7,000 \\ \hline \begin{tabular}{l} Heat and \\ Light \end{tabular} & $1,000 & $600 & $1,600 \\ \hline \begin{tabular}{l} Other \\ Productio \\ n Costs \end{tabular} & - & - & $2,800 \\ \hline \begin{tabular}{l} Marketing \\ and \\ Administr \\ ation \end{tabular} & - & - & $7,700 \\ \hline \begin{tabular}{l} Total \\ Costs \end{tabular} & - & - & $67,000 \\ \hline \begin{tabular}{l} Operating \\ Profit \end{tabular} & - & & $13,000 \\ \hline \end{tabular}