=+5. Assume that for the current year, the selling price of Product M was $42 per unit.

To date, 60,000 units have been produced and sold, and analysis of the domestic market indicates that 15,000 additional units are expected to be sold during the remainder of the year. Recently, Inez Company received an offer from Wong Inc.

for 4,000 units of Product M at $28 each. Wong Inc. will market the units in Korea under its own brand name, and no selling and administrative expenses associated with the sale will be incurred by Inez Company. The additional business is not expected to affect the domestic sales of Product M, and the additional units could be produced during the current year, using existing capacity.

(a) Prepare a differential analysis report of the proposed sale to Wong Inc.

(b) Based on the differential analysis report in part (a), should the proposal be accepted?