Circuit Masters Incorporated (CMI) is presently operating at 80% of capacity and manufacturing 122,000 units of a patented electronic component. The cost structure of the component is as follows:

Raw materials	$ 6.20	per unit
Direct labor	6.20	per unit
Variable overhead	8.20	per unit
Fixed overhead	$ 378,200	per year

An Italian firm has offered to purchase 20,200 of the components at a price of $25.00 per unit, FOB CMI's plant. The normal selling price is $32.60 per component. This special order will not affect any of CMI's "normal" business. Management calculated that the cost per component is $23.70, 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?