Farrow Co. expects to sell 200,000 units of its product in the next period with the following results. $3,000,000 Sales (200,000 units) Costs and expenses Direct materials Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses Net income 400,000 800,000 200,000 300,000 514,000 2,214,000 $ 786,000 The company has an opportunity to sell 20.000 additional units at $13 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 16% and (2) administrative expenses would increase by $86,000. Calculate the combined total net income if the company accepts the offer to sell additional units at the redu price of $13 per unit. Should the company accept or reject the offer? Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of per unit. Normal Volume 3,000,000 Additional Volume $ 240,000 Combined Total 3,240,000 $ Sales Costs and expenses: Direct materials Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses Incremental income (loss) from new business 400,000 800,000 200,000 300,000 514,000 40,000 80,000 30,000 440,000 880,000 230,000 300,000 600,000 2,450,000 790,000 2.214 000 86,000 236,000 4,000 786.000 $