5-A1 Special Order Consider the following details of the income statement of the McGregor Pen Company (MPC) for the year ended December 31, 20X0: Sales 10,000,000 Less cost of goods sold 6,000,000 Gross margin or gross profit 4,000,000 Less selling and administrative expenses 3,300,000 Operating income 700,000 MPC’s fixed manufacturing costs were $2.5 million and its fixed selling and administrative costs were $2.5 million. Sales commissions of 3% of sales are included in selling and administrative expenses. The division had produced and sold 2 million pens. Near the end of the year, Pizza Hut offered to buy 150,000 pens on a special order. To fill the order, a special Pizza Hut logo would have to be added to each pen. Pizza Hut intended to use the pens for special promotions in an eastern city during early 20X2. Even though MPC had some idle plant capacity, the president rejected the Pizza Hut offer of $660,400 for the 150,000 pens. He said, 1.using the contribution-margin technique, prepare an analysis similar to that in Exhibit 5-6 on page 187. Use four columns: without the special order, the effect of the special order (one column total and one column per unit), and totals with the special order.