Mystical Corporation manufacturers a single product with the following unit costs for 5,000 units:

Direct materials $60

Direct labor $30

Factory overhead (40 % varable) $90

Selling expenses ( 60% variable) $30

Administrative expenses ( 20% variable) $ 15

Total unit price $ 225

Recently, a company approached Mystical Corporation about buying 1,000units for $225. Currently, the models are sold to dealers for $ 412.50. Mystical's capacity is sufficient to produce the extra 1,000 units. No additional selling expenses would be incurred on the special order.

Required:

a. What is the profit earned by Mystical Corporation on the original 5,000 units ?

b. Should Mystical accept the special order if its goal is to maximize short-run profits ? How much will it be affected ?

c. Determine the minimum price Mystical would want to receive in order to increase profits by $ 7,500 on the special order.