Davis Company makes a product that regularly sells for $15.00 per unit. (Click the icon to view additional information.) 7. If Davis Company has excess capacity, should it accept the offer from Wesley? Show your calculations. 8. Does your answer change if Davis Company is operating at capacity? Why or why not? 7. If Davis Company has excess capacity, should it accept the offer from Wesley? Show your calculations. (Use Expected increase in revenue Expected increase in variable manufacturing costs Expected increase/(decrease) in operating income More info The product has variable manufacturing costs of $11.00 per unit and fixed manufacturing costs of $1.60 per unit (based on $192,000 total fixed costs at current production of 120,000 units). Therefore, total production cost is $12.60 per unit. Davis Company receives an offer from Wesley Company to purchase 4,600 units for $11.50 each. Selling and administrative costs and future sales will not be affected by the sale, and Davis does not expect any additional fixed costs