Calla Company produces skateboards that sell for $61 per unit. The company currently has the capacity to produce 100,000 skateboards per year, but is selling 80,700 skateboards per year. Annual costs for 80,700 skateboards follow.

Direct materials $ 968,400 Direct labor 710,160 Overhead 948,000 Selling expenses 547,000 Administrative expenses 461,000 Total costs and expenses $ 3,634,560

A new retail store has offered to buy 19,300 of its skateboards for $56 per unit. The store is in a different market from Calla's regular customers and it would not affect regular sales. A study of its costs in anticipation of this additional business reveals the following: