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Falrmount Travel Gear produces backpacks and sells them to vendors who sell them under thelr own label. The cost of one of Its backpacks follows.

image text in transcribed Falrmount Travel Gear produces backpacks and sells them to vendors who sell them under thelr own label. The cost of one of Its backpacks follows. Riverside Discount Mart, a chaln of low-price stores, has asked Falrmount to supply It with 21,000 backpacks for a speclal promotion Riverside Is planning. Riverside has offered to pay Falrmount a unit price of $44 per pack. The regular selling price Is $62. The specl order would require some modification to the basic model. These modifications would add $4.20 per unit in materlal cost, $1.70 per unit In labor cost, and $0.70 In varlable overhead cost. Although Falrmount has the capacity to produce the 21,000 units without affecting Its regular production of 452,000 unIts, a one-time rental of speclal testing equipment to meet Riverside's requirements would be needed. The equipment rental would be $55,800 and would allow Falrmount to test up to 52,000 unlts. Requlred: a. Prepare a schedule to show the Impact of filling the Riverside order on Falrmont's profits for the year. b. Do you agree with the decision to accept the special order? c. Considering only profit, determIne the minmum quantity of backpacks in the speclal order that would make it profitable. Complete this question by entering your answers in the tabs below. Prepare a schedule to show the impact of filling 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.)

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