A company that specializes in tours in England has offered to purchase 5,000 umbrellas at $11 each from Hampshire. The variable selling costs of these additional units will be $30 as opposed to $1.10 per unit. Also, this production activity will incur another $15,000 of fixed administrative costs. Should Hampshire agree to sell these additional 5,000 umbrellas to the touring business? Provide calculations to support your decision.

Need help only on Contribution Margin, and to see how it was reached.

H H # Total HHHH #T Sales Mix H Expected Sales Units Revenue = Sales X Price Variable costs X Units# Contribution Margin Fixed Costs Operating Income H Current 60,000 $750,000 $360,000 1 $390,000 $295,525 $94,475.00# # Specialty 5,000 $55,000 $31,000 ????? $15,000 65,000 $805,000 $391,000 $390,000 $310,525 # $79,4759 A # H # Prior Net Income From Requirement 18 H $94,475.00 #