Eiroa Marine Cable Company produces 400,000 feet of SS316 cable each year. At 400,000 _feet per year, the cost per foot is as follows:

A competitor, Garcia Marine, is interested in purchasing 175,000 feet of SS316 cable from Eiroa. Garcia has offered to pay $0.92 per foot for the cable. Eiroa has the capacity and can easily manufacture the cable for Garcia Marine.
Frank Eiroa, president of Eiroa Marine Cable, thinks it would be detrimental for the company to sell the cable for only $0.92 per foot.

Required:

a. Prepare a schedule that details the advantage or disadvantage of selling the 175,000 feet of cable to Garcia Marine.

b. Discuss the qualitative aspects of selling the cable to Garcia.

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Direct material Direct labor Variable overhead Fixed overhead Total $ .32 .14 .08 .73 $1.27