Decision on Accepting Additional Business Down Home Jeans Co. has an annual plant capacity of 65,000 units, and current production is 44,000 units. Monthly fixed costs are $38,900, and variable costs are $25 per unit. The present selling price is $35 per unit. On November 12 of the current year, the company received an offer from Fields Company for 16,500 units of the product at $27 each. Fields Company will market the units in a foreign country under its own brand name. The additional business is not expected to affect the domestic selling price or quantity of sales of Down Home Jeans Co. a. Prepare a differential analysis dated November 12 on whether to reject (Alternative 1) or accept (Alternative 2) the Fields order. If an amount is zero, enter zero "O". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) November 12 Reject Accept Differential Order Order Effect (Alternative 1) (Alternative 2) on Income (Alternative 2) Revenues 19,855 x 445,500 Costs: Variable manufacturing costs 0 x -15,125 x -412,500 Income (Loss) 0 4,730 X 33,000 Feedback Check My Work a. Subtract the additional costs from the additional revenues for accepting the order. b. Having unused capacity available is relevant to this decision. The differential revenue is more than the differential cost. Thus, accepting this additional business will result in a net gain. c. What is the minimum price per unit that would produce a positive contribution margin? Round your answer to two decimal places. 2.5 x Feedback Check My Work b. What is the effect on capacity? What is the net gain/loss? c. What are the variable costs per unit? Feedback Check My Work Partially correct