Answer:
MTA Sandwiches
a. A Schedule:
                                   Special Order  Regular Production    Total
Total contribution       $540                   $18,900                $19,440
Fixed overhead              0                        10,800                  10,800
Profit                           $540                     $8,100                  $8,640
Profits increased by $540 with the special order.
b. The lowest price per sandwich at which this special order  of 400 sandwiches can be filled without reducing MTA's profits is $4.05.  This is equal to the unit variable cost.  At this price, neither profit will be generated nor loss incurred from the special order.
Explanation:
a) Data and Calculations:
Cost of each sandwich:
Materials                             $ 2.70 
Labor                                     0.90 
Variable overhead                0.45 
Fixed overhead
 ($10,800 per month, 
 6,000 units per month)       1.80 
Total costs per sandwich $ 5.85
b) Computation of total profit for special order and regular production:
                                       Special Order     Regular Production   Total
Selling price =                           $5.40         7.20
Variable (Relevant) cost:
Materials                   $ 2.70 
Labor                           0.90 
Variable overhead      0.45      $4.05        $4.05
Contribution per unit                $1.35         $3.15
Total contribution ($1.35*400) $540     $18,900  ($3.15*6,000)   $19,440
Fixed overhead                                                                                  10,800
Profit                                                                                                  $8,640