CASE 10. 2. THE CONTRACT PROPOSAL ( Page No. 3:47, Chapter No. 10] DENNIS Darby owns a Small manufacturing firm that produces ELECTIONLL CONTIDONENES for LIFE IN helicopters . Most of his business is a result of military and aircraft Manufacturer Contracts . although 10 percent of revenues COME from firms that own or rent helicopters . The latter are* typically large Fortune 500 companies or leasing rental firms that work on a contractual basis for Clients. Dennis would like to Increase hus revenues from Sales to private Corporations that Own their own helicopters . Specifically , he would like to do more business with oil companies that IMaintain helicopter fleets for ferrying PEOPLE to and from oil rigs in the Gulf Of Mexico and other offshore locations . Early this week Dennis received a request from an oil company for 1 2'D Electronic components . HE turned the order over to his chief Estimator , who Estimates that the fixed costs associated with producing these components will be 535,000 , the unit variable* Cost will be $ 400, and the unit selling Price Will be FOOD Dennis will not accept any order on which the return on Sales IS LESS than 20 perCENT . Additionally, the Estimator has told him that a $ 1, OOD EXPENSE can be classified as Either fixed or variable . Dennis intends to take this information and make a decision whether to accept the Contract from the all Company. HE has to make a decision within the next three days