Exercise 8-11 The R Company has annual production of 60,000 units a year. Budgeted operating results for 2020 are as follows: P500,000 P160,000 40,000 200,000 P300,000 Sales (50,000 units @ P10) Variable costs & expenses: Manufacturing (50,000 units @P3.20) Selling (50,000 @P0.80) Contribution margin Fixed costs & expenses: Manufacturing Selling Net income P100,000 80,000 180,000 P120,000 A wholesaler from another part of the country wants to buy 5,000 units at a price of P8 per unit. All fixed cost would remain within the relevant range. Variable manufacturing costs would be the same per unit but the variable selling expenses would increase by P2 per unit on the special order only. REQUIRED: 1. Determine whether the company should accept the special order. Use two solutions like Exercise 8-10. 2. Assuming the company wants to maximize profits, if the customer wants the special order to be 20,000 units, should the company reject the special order? Use two solutions also like no. 1