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Book Pardo Company produces a single product and has capacity to produce 120,000 units per month. Costs to produce its current monthly sales of 96,000
Book Pardo Company produces a single product and has capacity to produce 120,000 units per month. Costs to produce its current monthly sales of 96,000 units follow. The normal selling price of the product is $124 per unit. A new customer offers to purchase 24,000 units for $63.90 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. H Direct materials Pitt Direct labor eferences Fixed overhead Variable overhead Fixed general and administrative Totals Per Unit $12.50 Costs at 96,000 Units $1,200,000 15.00 1,440,000 11.00 1,056,000 17.50 1,600,000 15,00 $71.00 1,440,000 $6,816,000 (a) Compute the income from the special offer. (b) Should the company accept the special offer? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income for the special offer. (Round your "Per Unit" answers to 2 decimal places.) Sales ok Variable costs ht int ences SPECIAL OFFER ANALYSIS Direct materials Direct labor Variable overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative. Income. Per Unit Total 63.90 12.50 15.00 11.00 25.40 0 $ 25.40 $ 0 Required B >
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