Question 1:Shanghai Exports, LTD produces wall mounts for fiat panel television sets. The forecasted incomestatement for 2014 is as follows: Shanghai Exports, LTD Budgeted Income Statement For the Year 2014 Sales ($ 44 per unit)$ 4,400,000 Cost of good sold ($ 32 per unit)(3,200,OOO) Gross profit 1,200,000 Selling expenses ($ 3 per unit)(300,OOO) Net income $900,000 Additional Information (1) Of the production costs and selling expenses, $800,000 and are Fixed. (2) Shanghai Evorts, LTD received a special order from a hospital supply company offering to buy 12,500 wall mounts for $30. If it accepts the order, there will be noadditional selling expenses, and there is currently sufficient excess capacit,' to fill the order. ThecompanVs sales manager argues for rejecting the order because "we are not in the business ofpaying $32 to make a product to sell for $30. Calculate the net benefit (cost) of accepting the special order. variable COGS perunit= = $24 Fixed production cost per unit = 800,000 / 112,500 = 0.71 variableCOGS $24 12,500=300,000 300,000 - 75,000 Total COGS Net Income 300,000 = 375,000