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6 Exercise 10-14 (Static) Special offer pricing LO P7 points Pardo Company produces a single product and has capacity to produce 120,000 units per month
6 Exercise 10-14 (Static) Special offer pricing LO P7 points Pardo Company produces a single product and has capacity to produce 120,000 units per month Costs to produce its current monthly sales of 80,000 units follow. The normal selling price of the product is $100 per unit. A new customer offers to purchase 20,000 units for $75 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales. Direct materials birect labor Variable overhead Fixed overhead Fixed general and administrative Totals Por Unit $ 12.50 29.00 10.00 17.50 13.00 $ 82.00 Costs at 80.000 Unito 61,000,000 2.320,000 800.000 1,400,000 1,040.000 $ 6,560,000 Required A Required B Compute the income for the special offer. (Round your "Per Unit" answers to 2 decimal places.) SPECIAL OFFER ANALYSIS Per Unit Total Variable costs Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income Required A Required B Should the company accept the special offer? Should the company accept the special offer? Powe
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