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Fairmount Travel Gear produces backpacks and sells them to vendors who sell them under their own label. The cost of one of its backpacks follows

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Fairmount Travel Gear produces backpacks and sells them to vendors who sell them under their own label. The cost of one of its backpacks follows Materials Labor Variable overhead Fixed overhead ($3, 114,400 per years 458,000 units per year) Total $18.30 12.30 5.80 6.80 $44.20 Riverside Discount Mart, a chain of low-price stores, has asked Falmount to supply it with 27000 backpacks for a special promotion Riverside is planning. Riverside has offered to pay Fairmount a unit price of $48 per pack. The regular selling price is $68. The special order would require some modification to the basic model. These modifications would add $1.80 per unit in material cost. 52 30 per unit in labor cost , and $1.30 in variable overhead cost. Although Fairmount has the capacity to produce the 27,000 units without affecting its regular production of 458.000 units, a one time rental of special testing equipment to meet Riverside's requirements would be needed. The equipment rental would be $70,400 and would allow Falmount to test up to 58,000 units. Required: a. Prepare a schedule to show the impact of filling the Riverside order on Fairmont's profits for the yeat. b. Do you agree with the decision to accept the special order? c. Considering only profit determine the minimum quantity of backpacks in the special order that would make it profitable. Complete this question by entering your answers in the tabs below. Required A Required B Required Prepare a schedule to show the impact of rilling the Riverside order on Fairmont's profits for the year (Enter your answers in thousands rounded to 1 decimal place (ho, 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower keeping Status Quo as the base. Select "none" if there is no effect)

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