Exercise 23-2 Accept new business or not LO A1 23 Farrow Co expects to sell 300.000 units of its product in the next period with the following results. $4,500,000 10 pos 9023450 Sales (300,000 units) costs and expenses Direct materials Direct lsbor Overhead Selling expenses Administrative expenses Total costs and expenses Net Income 600,000 1,200,000 300,000 450,000 721,000 2321.000 $1,179,000 book H The company has an opportunity to sell 30.000 additional units at $12 perunt the additional cale would not affect its current expected sales Direct materials and labor costs per unit would be the same for the additional units as they are for the regular units However, the additional volume would create the following incremental costs total overhead would increase by 16% and (2) administrative expenses would increase by $129,000 Calculate the combined total net income of the company accepts the offer to sell additional units at the reduced price of $12 per unit Normal Volume Additional Volume Combined Total Costs and on Normal Volume Additional Volume Combined Total 0 Costs and expenses 0 0 0 38 0 0 0 0 0 Total costs and expenses Incremental income (loss) from new business $ 0 $ 0 0 es Should the company accept or reject the offer? The company should accept the offer The company should reject the offer