Calla Company produces skateboards that sell for $63 per unit. The company currently has the capacity to produce 100,000 skateboards per year, but is selling 80,800 skateboards per year. Annual costs for 80,800 skateboards follow.

Direct materials	$	856,480
Direct labor		694,880
Overhead		960,000
Selling expenses		550,000
Administrative expenses		469,000
Total costs and expenses	$	3,530,360

A new retail store has offered to buy 19,200 of its skateboards for $58 per unit. The store is in a different market from Calla's regular customers and would not affect regular sales. A study of its costs in anticipation of this additional business reveals the following:

• Direct materials and direct labor are 100% variable.
• 50 percent of overhead is fixed at any production level from 80,800 units to 100,000 units; the remaining 50% of annual overhead costs are variable with respect to volume.
• Selling expenses are 80% variable with respect to number of units sold, and the other 20% of selling expenses are fixed.
• There will be an additional $3.10 per unit selling expense for this order.
• Administrative expenses would increase by a $900 fixed amount.