Shelby Industries has a capacity to produce 45,000 oak shelves per year and is currently selling 40,000 shelves for $32 each. Ma
rtin Hardwoods has approached Shelby about buying 1,050 shelves for a new project and is willing to pay $26.8 each. The shelves can be packaged in bulk; this saves Shelby $1.14 per shelf compared to the normal packaging cost. Shelves have a unit variable cost of $25.4 with fixed costs of $350,000. Because the shelves don’t require packaging, the unit variable costs for the special order will drop by $1.14 per shelf. Shelby has enough idle capacity to accept the contract. What is TOTAL the profit/loss if Shelby should accept for this special order?
