Circuit Masters Incorporated $($CMI$)$ is presently operating at $80\%$ of capacity and manufacturing $112,000$ units of a patented electronic component. The cost structure of the component is as follows:

Raw materials $ $7\mathrm{.}40$ per unit

Direct labor $7\mathrm{.}40$ per unit

Variable overhead $9\mathrm{.}40$ per unit

Fixed overhead $ $481,600$ per year

An Italian firm has offered to purchase $21,400$ of the components at a price of $$31\mathrm{.}00$ per unit, FOB CMI's plant. The normal selling price is $$36\mathrm{.}20$ per component. This special order will not affect any of CMI's "normal" business. Management calculated that the cost per component is $$28\mathrm{.}50,$ so it is reluctant to accept this special order.

Required:

Calculate the fixed overhead per unit.

Is the cost calculation appropriate?

Should the offer from the Italian firm be accepted?