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Circuit Masters Incorporated ( CMI ) is presently operating at 8 0 % of capacity and manufacturing 1 2 6 , 0 0 0 units

Circuit Masters Incorporated (CMI) is presently operating at 80% of capacity and manufacturing 126,000 units of a patented electronic component. The cost structure of the component is as follows:
\table[[Raw materials,$6.60 per unit],[Direct labor,6.60 per unit],[Variable overhead,8.60 per unit],[Fixed overhead,$441,000 per year]]
An Italian firm has offered to purchase 20,600 of the components at a price of $27.00 per unit, FOB CMI's plant. The normal selling price is $33.80 per component. This special order will not affect any of CMI's "normal" business. Management calculated that the cost per component is $25.30, so it is reluctant to accept this special order.
Required:
a. Calculate the fixed overhead per unit.
b. Is the cost calculation appropriate?
c. Should the offer from the Italian firm be accepted?
Complete this question by entering your answers in the tabs below.
Req A Req B and C
Calculate the fixed overhead per unit?
Note: Round your answer to 2 decimal places.
Fixed overhead per unit
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