Could you please check the attached answer whether it is correct or not and clarify why when overhead been calculated for special offer (1000 pairs) get multiplied by 40% while in the income statement it was used as given (34.45)?

Example 2: Snowshoe, Inc., a manufacturer of ski equipment, has been asked to sell 1,000 pairs of skis to a discount sporting goods shop in Maine for $100 a pair. Snowshoe would not put its name on this special order, and the dealer would therefore sell the skis below their normal retail price. The capacity for Snowshoe is 25,000 pair of skis per year. The company's sales forecast for this year, excluding the special order, is 20,000 pairs at a selling price of $143.75 per unit. Snowshoe's budgeted income statement is: Oxample 2: Special Order Relevant costs for one time special order are the Incremental costs. Incremental costs in this case are the Variable costs as they are incurred additionally for this order. Fixed costs are irrelevant because there would be no additional fixed costs incurred by accepting this offer. In given case, Fixed factory overhead is irrelevant. Nothing is given about selling and administrative expenses. Alternative 1: If selling and administrative expenses are considered as variable expenses: Given, for special order Number of units =1,000 pairs Selling Price =$100 per pair Direct Materials =$37.50 Direct Labor =$31.10 Variable factory overhead =($34.4540%)=$13.78 Selling and administrative expenses =$27.50 Incremental Profit = Incremental Revenue - Incremental Costs Incremental Revenue =1,000 pairs $100 per pair =$100,000 Why the expert when he Incremental Costs =1,000 pairs * ($37.50+$31.10+$13.78+$27.50) =1,000$109.88=$109,880 Incremental Profit =$100,000$109,880=$9,880