Exercise $10-14($Algo$)$ Special offer pricing LO P$7$

Pardo Company produces a single product and has capacity to produce $135,000$ units per month. Costs to produce its current monthly sales of $108,000$ units follow. The normal selling price of the product is $$116$ per unit. A new customer offers to purchase $27,000$ units for $$62\mathrm{.}10$ 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.

$\backslash$table$[[,$Per Unit,Costs at $108,000$ Units$],[$Direct materials,$ $12\mathrm{.}50,$$ $1,350,000],[$Direct labor,$15\mathrm{.}00,1,620,000],[$Variable overhead,$11\mathrm{.}00,1,188,000],[$Fixed overhead,$17\mathrm{.}50,1,890,000],[$Fixed general and administrative,$13\mathrm{.}00,1,404,000],[$Totals$,$$ $69\mathrm{.}00,$$ $7,452,000]]$

$($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

Compute the income for the special offer. $($Round your "Per Unit" answers to $2$ decimal places.$)$

$\backslash$table$[[$SPECIAL OFFER ANALYSIS,Per Unit,Total$],[$Sales$,$$ $62\mathrm{.}10,],[$Variable costs,,$],[$Direct materials,$12\mathrm{.}50,],[$Direct labor,$15\mathrm{.}00,],[$Variable overhead,,$],[$Contribution margin,$34\mathrm{.}60,0],[$Fixed costs,,$],[$Fixed overhead,,$],[$Fixed general and administrative,,$],[$Income$,$$ $34\mathrm{.}60,$$ $0]]$