Custom Metal Works received an offer from a big-box retail company to purchase 3,000 metal outdoor tables for $220 each. Custom Metal Works accountants determine that the following costs apply to the tables:

Direct material$125

Direct labor 50

Manufacturing overhead 70

Total$245

Of the $70 of overhead, $14 is variable and $56 relates to fixed costs. The $56 of fixed overhead is allocated as $1.12 per direct labor dollar.

Explain why managers who focus on reported cost per unit may be inclined to turn down the order.