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Dove Company has the capacity to produce 50,000 units but is currently selling only 40,000 units of a product at a price of $54.00 per

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Dove Company has the capacity to produce 50,000 units but is currently selling only 40,000 units of a product at a price of $54.00 per unit. Unit costs at capacity are as follows: Variable manufacturing cost S 30.00 per unit Variable Selling $ 1.00 per unit Fixed MOH (at capacity) $ 6.00 per unit $ 37.00 The variable manufacturing costs include costs of direct materials, direct labor, and variable manufacturing overhead. The company is interested in using its idle (excess) capacity and is seeking orders from foreign customers for which they are willing to accept a reduced price. 2 Egret Inc. has expressed an interest in purchasing the product. Egret would like to buy 12,000 units (all or nothing) at a price of $40.00 per unit. These units would require some modification, which increases the variable cost per unit by $5.00, but there would be no variable selling expenses. The best course of action for Dove is to: A. B. C. D. E. Reject Egret's offer because the price is lower than the regular price. Accept Egret's offer because their profit will increase by $60,000. Accept Egret's offer because their profit will increase by $48,000. Accept Egret's offer because their profit will increase by $14,000. None of the above

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