Special order

For The Ages Inc. produces solid$-$oak umbrella stands. Each stand is handmade and hand finished using the finest materials available. The firm has been operating at capacity $(3,600$ stands

per year$)$ for the past three years. Based on this capacity of operations, the firm's costs per stand are as follows:

All selling and administrative expenses incurred by the firm are fixed. The average selling price of stands is $$230.$ Recently, a large retailer approached Bill Wood, the president of For the

Ages, about supplying $5$ special stands to give as gifts to CEOs of key suppliers. Wood estimates that the following per$-$unit costs would be incurred to make the $5$ stands:

To accept the special order, the firm would have to sacrifice production of $36$ regular units.

a$.$ Identify the total relevant cost that Wood should consider in deciding whether to accept the special order. $

b$.$ Assume the retailer offers to pay For The Ages a total of $$6,840$ for the $5$ stands. How would accepting this offer affect For The Ages' pre$-$tax income?

Note: Do not use a negative sign with your answer.

Accepting the offer would result in an