1. The company has excess capacity (the capacity is 15000 units)

2. The Company is working in full capacity and has not excess capacity

3. The company has limited capacity and to accept the offer it needs to lease another facility for one time by $10,000

Question One: Rowland Company is producing 10,000 units of (Modem Z) annually at a selling price of $60 while the cost of production is: Direct Material $15 per unit Direct Labor $8 per unit Variable Overhead $7 per unit Allocated Fixed Overhead Cost $20 per unit (Total $200,000) They have received an offer to sell additional 3000 units for a new customer at selling price of $32. Required: Do the company accept this offer under following independent assumptions: (Show your Calculations incrementer