Calla Company produces skateboards that sell for $s0 per unit. The company currently has the capacity to produce 90,000 skateboards per year, but is selling 80,000 skateboards per year. Annual costs for skateboards follow. Problem 23-2A 80,000 Analysis of income effects of additional business A1 Direct materials. . 800,000 640,000 960,000 ...560,000 . Direct labor Administrative expenses Total costs and expenses.... 480,000 3,440,000 A new retail store has offered to buy 10,000 of its skateboards for $45 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 anticipa- tion of this additional business reveals the following: Direct materials and direct labor are 100% variable. Thirty percent of overhead is fixed at any production level from 80,000 units to 90,000 units; the r maining 70% of annual overhead costs are variable with respect to volume. Selling expenses are 60% variable with respect to number of units sold, and the other 40% of selling expenses are fixed. . There will be an additional $2 per unit selling expense for this order. Administrative expenses would increase by a $1,000 fixed amount