Down Home Jeans Co. has an annual plant capacity of 64,700 units, and current production is 43,400 units. Monthly fixed costs are $39,500, and variable costs are $25 per unit. The present selling price is $33 per unit. On February 2, 2014, the company received an offer from Fields Company for 15,600 units of the product at $29 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 adifferential analysison whether to reject (Alternative 1) or accept (Alternative 2) the Fields order. If an amount is zero, enter zero "0"

b.Having unused capacity available isSelect

relevant

irrelevant

to this decision. The differential revenue isSelect

more

less

than the differential cost. Thus, accepting this additional business will result in a netSelect

gain

loss

.

c.What is the minimum price per unit that would produce a positive contribution margin? Round your answer to two decimal places.

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