Farrow Co. expects to sell 150,000 units of its product in the next period with the following results.

Sales (150,000 units)	$	2,250,000
Costs and expenses
Direct materials		300,000
Direct labor		600,000
Overhead		150,000
Selling expenses		225,000
Administrative expenses		385,500
Total costs and expenses		1,660,500
Net income	$	589,500

The company has an opportunity to sell 15,000 additional units at $12 per unit. The additional sales would not affect its current expected sales. Direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. However, the additional volume would create the following incremental costs: (1) total overhead would increase by 15% and (2) administrative expenses would increase by $64,500. Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $12 per unit.

Normal Volume Additional Volume Combined Total Costs and expenses: Total costs and expenses L o o L 0 $ L 0 $ Incremental income (loss) from new business $ 0 Should the company accept or reject the offer? O The company should reject the offer O The company should accept the offer