Accept or reject a special sales order. APA Inc. manufactures automation machinery according to customer specifications. The company is relatively new and has grown each year. AP operated at about 75% of practical capacity during its most recent fiscal year ended September 30, with the following operating results (000's omitted): Sales P 25,000 Less: Sales commissions 2.500 Net sales 225.00 Costs: Direct materials P 6,000 Direct labor 7,500 Factory overhead - variable: Supplies P 625 Indirect labor 1,500 Power 125 2.250 Factory overhead - fixed Supervision 500 Depreciation 1.000 1,500 Corporate administration 750 Total expenses P. 18.00.0 Income before income tax 4,500 Income tax (40%) 1.800 Net income P2700 1 APA management has developed a pricing formula based on current operating costs, which are expected to prevail for the next year. This formula was used in developing the following bid for APA Inc.: Direct materials cost P 29,200 Direct labor cost 56,000 Factory overhead calculated at 50% of direct labor 28,000 Corporate overhead calculated at 10% of direct labor 5.600 Total cost, excluding sales commission 118,800 Add 25% for profit and tax 29.700 Suggested price (with profit) before sales commission P148.500 Suggested total price (suggested price divided by 9 to adjust for 10% sales commission) 2165.000 Required 1. Compute the impact on net income if APA accepts the bid. 2 Determine the suggested decision if APA is willing to pay only P127,000 3. Calculate the lowest price APA can quote without reducing current net income. 4 Determine the effect on the most recent fiscal year's profit if all work is done at prices similar to APA's P127,000 counteroffer? (icma)