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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 $19.00 3.00 6.00 7.00 $45.00 Variable overhead Fixed overhead (53,220,000 per year; 460,000 units per year) Riverside Discount Mart, a chain of low-price stores, has asked Fairmount to supply it with 29,000 backpacks for a special promotion Riverside is planning. Riverside has offered to pay Fairmount a unit price of $49 per pack. The regular selling price is $70. The special order would require some modiication to the basic model. These modifications would add $5.00 per unit in material cost, $2.50 per unit n labor cost, and $1.50 in variable overhead cost. Although Fairmount has the capacity to produce the 29,000 units without affecting its regular production of 460,000 units, a one-time rental of special testing equipment to meet Riversides requirements would be needed. The equipment rental would be $68,000 and would allow Fairmount to test up to 60,000 units. a. Prepare a schedule to show the impact of illing the Riverside order on Fairmont's profits for the year. (Enter your answers in thousands rounded to 1 decimal place. (i.e,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 Status Quo Alternative Sales revenue Less variable costs Variable overhead Total variable cost Contribution margin Less: Fixed costs

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