Pardo Company produces a single product and has capacity to produce 120,000 units per month. Costs...

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Pardo Company produces a single product and has capacity to produce 120,000 units per month. Costs to produce its current monthly sales of 80,000 units follow. The normal selling price of the product is $100 per unit. A new customer offers to purchase 20,000 units for $75 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales. Direct materials Direct labor Variable overhead Fixed overhead Fixed general and administrative Totals Per Unit Costs at 80,000 Units $ 12.50 $ 1,000,000 29.00 10.00 17.50 13.00 2,320,000 800,000 1,400,000 1,040,000 $ 82.00 $ 6,560,000 (a) Compute the income from the special offer. (b) Should the company accept the special offer? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income for the special offer. (Round your "Per Unit" answers to 2 decimal places.) Variable costs SPECIAL OFFER ANALYSIS Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income Per Unit Total Pardo Company produces a single product and has capacity to produce 120,000 units per month. Costs to produce its current monthly sales of 80,000 units follow. The normal selling price of the product is $100 per unit. A new customer offers to purchase 20,000 units for $75 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales. Direct materials Direct labor Variable overhead Fixed overhead Fixed general and administrative Totals Per Unit Costs at 80,000 Units $ 12.50 $ 1,000,000 29.00 10.00 17.50 13.00 2,320,000 800,000 1,400,000 1,040,000 $ 82.00 $ 6,560,000 (a) Compute the income from the special offer. (b) Should the company accept the special offer? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income for the special offer. (Round your "Per Unit" answers to 2 decimal places.) Variable costs SPECIAL OFFER ANALYSIS Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income Per Unit Total

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Answer To compute the income from the special offer we need to calculate the variable costs contribu... View the full answer