Assignment Question 1, E5-40 (book/static) HW Score: 4.07%, 2.04 of 50 points Part 2 of 4 Points: 2.04 of 11 Save The Velasquez Company, a maker of a variety of metal and plastic products, is in the midst of a business downturn and is saddled with many idle facilities. Columbia Health Care ha V approached Velasquez to produce 300,000 nonslide serving trays. Columbia will pay $1.50 each. Velasquez predicts that its variable costs will be $1.60 each. Its fixed costs, which had been averaging $1 per unit on a variety of other products, will now be spread over twice as much volume, however. The president commented, "Sure we'll lose $0. 10 each on the variable costs, but we'll gain $0.50 per unit by spreading our fixed costs. Therefore, we should take the offer because it represents an advantage of $0.40 per unit." Suppose the regular business had a current volume of 300,000 units, sales of $600,000, variable costs of $480,000, and fixed costs of $300,000. Requirement 1. Do you agree with the president? Why