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How do I calculate the differential operating profit/loss? From an operating profit/loss perspective for March, should Ms. Nili accept the offer? What is the minimum price Ms. Nili should accept to take the special order?

CoursHeroTranscribedText: Sherene Nili manages a company that produces wedding gowns. She produces both a custom product that is made to order and a standard product that is sold in bridal salons. Her accountant prepared the following torecasted income statement tor March, which is a busy month: Custom Dramas Standard Dreeeee Total Number of dresses 10 20 30 Sales revenue 554.500 534.500 3 89.000 Materials 510.900 3 8.900 5 19,800 Labor 20.900 9.900 30.800 Machine depreciation 690 390 1.080 Rent 5.100 3.700 8.800 Heat and light 1.000 600 1.600 Dlhar production costs 3,700 Marketing and administration 8,600 Total costs 3 74,380 Operan'ng prot 5 14.620 Ms. Nili already has orders for the 10 custom dresses reected in the March lorecasted income statement. The depreciation charges are for machines used in the respective product lines. Machines depreciate at the rate of $1 per hour based on hours used, so these are variable costs. In March, cutting and sewing machines are expected to operate for 1,080 hours, of which 690 hours will be used to make custom dresses. The rent is for the building space. which has been leased for several years at $8,800 per month. The rent. heat. and light are allocated to the product lines based on the amount of tloor space occupied A valued customer. who is a wedding consultant, has asked Ms. Nili for a special favor. This customer has a client who wants to get married in early April. Ms. Nili's company is working at capacity and would have to give up some other business to make this dress. She can't renege on custom orders already agreed to, but she can reduce the number of standard dresses produced in March to 10. Ms. Nili would lose permanentty the opportunity to make up the lost production of standard dresses because she has no unused capacity tor the foreseeable future. The customer is willing to pay $28,500 for the special order. Materials and labor for the order will cost $6,900 and $10900. respectively. The special order would require 176 hours of machine time. Ms. Nili's company would save 195 hours of machine time from the standard dress business given up. Rent. heat and light, and other production costs would not be effected by the special order. Required: a-1. Calculate the ditterential operating prot (loss). (Select option "increase" or "decrease", keeping Without special order as the base. Select "none" it there is no effect.) Revenue Materials Labor Machine depreciation Contribution margin Rem Heat and light other producn'on costs Marketing and administration Operating prot (loss) aZ. From an operating prot (loss) perspective for March. should Ms. Nili accept the order? ("Yes mNa b. What is the minimum price Ms. Nili should accept to take the special order

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