Pardo Company produces a single product and has capacity to produce 160,000 units per month. Costs...

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Pardo Company produces a single product and has capacity to produce 160,000 units per month. Costs to produce its current monthly sales of 128,000 units follow. The normal selling price of the product is $100 per unit. A new customer offers to purchase 32,000 units for $65.70 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 (a) Compute the income from the special offer. (b) Should the company accept the special offer? Per Unit Costs at 128,000 Units $ 12.50 $ 1,600,000 15.00 1,920,000 12.00 1,536,000 17.50 2,240,000 16.00 2,048,000 $ 73.00 $ 9,344,000 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.) Sales Variable costs SPECIAL OFFER ANALYSIS Direct materials Direct labor Variable overhead Per Unit Total $ 65.70 12.50 15.00 12.00 26.20 Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income $ 26.20 $ 0 Pardo Company produces a single product and has capacity to produce 160,000 units per month. Costs to produce its current monthly sales of 128,000 units follow. The normal selling price of the product is $100 per unit. A new customer offers to purchase 32,000 units for $65.70 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 (a) Compute the income from the special offer. (b) Should the company accept the special offer? Per Unit Costs at 128,000 Units $ 12.50 $ 1,600,000 15.00 1,920,000 12.00 1,536,000 17.50 2,240,000 16.00 2,048,000 $ 73.00 $ 9,344,000 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.) Sales Variable costs SPECIAL OFFER ANALYSIS Direct materials Direct labor Variable overhead Per Unit Total $ 65.70 12.50 15.00 12.00 26.20 Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income $ 26.20 $ 0

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The Net Income from the special offer is given below Special Offer ... View the full answer