Farrow Co. reports the following annual results. The company receives a special offer for 15,000 units at \(\$ 12\) per unit. The additional sales would not affect its normal sales. Variable costs per unit would be the same for the special offer as they are for the normal units. The special offer would require incremental fixed overhead of \(\$ 60,000\) and incremental fixed general and administrative costs of \(\$ 4,500\). 

(a) Compute the income for the special offer. 

(b) Should the company accept the special offer?

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Contribution Margin Income Statement Per Unit Sales (150,000 units)... $15.00 Variable costs Direct materials... Direct labor..... Overhead... Contribution margin.. Fixed costs Fixed overhead.... Fixed general and administrative. Income.... 2.00 4.00 2.50 6.50 2.00 1.50 $ 3.00 Annual Total $2,250,000 300,000 600,000 375,000 975,000 300,000 225,000 $ 450,000