es For Year Ended December 31 Sales (400,000 units) Variable costs Direct materials Direct labor Variable overhead Contribution margin Fixed costs Contribution Margin Income Statement Per Unit $ 6.00 Fixed overhead Fixed general and administrative Income 1.44 0.36 0.60 3.60 0.20 0.15 $ 3.25 A potential customer offers to buy 50,000 units for $3.20 each. These sales would not affect the company's sales through its norma channels. Details about the special offer follow. A Required: 1. Compute income from the special offer. Annual Total $ 2,400,000 Direct materials cost per unit and variable overhead cost per unit would not change. Direct labor cost per unit would be $0.54 because the offer would require overtime pay. Accepting the offer would require incremental fixed general and administrative costs of $5,000. Accepting the offer would require no incremental fixed overhead costs. 576,000 144,000 240,000 1,440,000 80,000 60,000 $ 1,300,000

A potential customer offers to buy 50,000 units for $3.20 each. These sales would not affect the company's sales through its norm channels. Detalis about the special offer follow. - Direct materials cost per unit and variable overhead cost per unit would not change. - Direct labor cost per unit would be $0.54 because the offer would require overtime pay - Accepting the offer would require incremental fixed general and administrative costs of $5,000. - Accepting the offer would require no incremental fixed overhead costs Required: Required: 1. Compute income from the special offer. 2. Should the company accept or reject the special offer? Complete this question by entering your answers in the tabs below. Compute income from the special offer. (Round your "Per Unit" answers to 2 decimal places.)