Determined NOI Ouestion 6 (14+4 ulieam Company produces a single product. The cost of producing and selling a single unit of this product at the compaTy's nomal activity level of 60,000 units per month is as follows: Direct matcrials Dirost labr Variable mansfacturing on crhead Fexed manufacturing overhcad Variable selling&administrative espense Fesed selling&aminstrative expemse 534.00 $4.00 2.00 21.30 52.70 $7.00 The normal selling price of the product is $79.30 per unmit. An order has been received from an overseas customer for 2,000 umits to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be 50.30 less per unit on this order than on normal sales. The special discounted price on the special order is 71.60 per unit. (Scenario A) Suppose the company has normal sales of 50,000 units and there is ample idle capacity to produce the umits required by the overseas customer a) In Scenario A, By how much would this snecialorder increase (decrease) the companys net operating income for the month? (8) Increase NI by 142,000 b) (Scenario B) Suppose the company has normal sales of 58,800 units when the special order is received from the overseas customer. This means that there is not enough idle capacity to produce all of the umits for the overseas customer and accepting the special order woultd require cutting back on production of 300 units for regular customers. If the company would accept this offer at the price of $71.60 per unit, by how much the company's net operating income would change? (6) c) [bonus (Scenario B) What would be the minimm acceptable price per unit for the special order? [4]