Computer Inc. is a manufacturer of USB Flash Drives. The regular market price of their 16GB...

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Computer Inc. is a manufacturer of USB Flash Drives. The regular market price of their 16GB model is $26 each. The company has been approached by a major sports franchise with a special order for 25,000 units of 16GB flash drives in their team colours at a price of $18 each. The company's total cost of production for this model is $22 per USB, as follows: Variable costs: Direct materials Direct labour $11.00 3.75 Variable overhead 2.50 Fixed overhead Total cost 4.75 $22.00 Required: 1. Assuming Computer Inc. has excess capacity and fixed costs would not be affected by the special order, prepare an incremental analysis to determine whether the company should accept the special order. (Please state your decision after showing your calculation). 2. Assume that Computer Inc. wants to get the major sports franchise to become a long-term customer, and is willing to 'break-even' on this special order. Calculate the lowest price that the company can charge to break-even on this special order. Assume the same information about costs as per above. 3. Assume the same information as in Requirement 1, except that the major sports franchise requires modified flash drives that require 20% more direct materials than the regular model. To earn a $2.00 per unit profit from this special order, what price must be charged? Computer Inc. is a manufacturer of USB Flash Drives. The regular market price of their 16GB model is $26 each. The company has been approached by a major sports franchise with a special order for 25,000 units of 16GB flash drives in their team colours at a price of $18 each. The company's total cost of production for this model is $22 per USB, as follows: Variable costs: Direct materials Direct labour $11.00 3.75 Variable overhead 2.50 Fixed overhead Total cost 4.75 $22.00 Required: 1. Assuming Computer Inc. has excess capacity and fixed costs would not be affected by the special order, prepare an incremental analysis to determine whether the company should accept the special order. (Please state your decision after showing your calculation). 2. Assume that Computer Inc. wants to get the major sports franchise to become a long-term customer, and is willing to 'break-even' on this special order. Calculate the lowest price that the company can charge to break-even on this special order. Assume the same information about costs as per above. 3. Assume the same information as in Requirement 1, except that the major sports franchise requires modified flash drives that require 20% more direct materials than the regular model. To earn a $2.00 per unit profit from this special order, what price must be charged?