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Farrow Co. expects to sell 500,000 units of its product in the next period with the following results. Sales (500,000 units) $7,500,000 Costs and expenses

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Farrow Co. expects to sell 500,000 units of its product in the next period with the following results. Sales (500,000 units) $7,500,000 Costs and expenses Direct materials 1,000,000 Direct labor 2,000,000 Overhead 500,000 Selling expenses 750,000 Administrative 1,285,000 expenses Total costs and 5,535,000 expenses Net income $1,965,000 The company has an opportunity to sell 50,000 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 $215,000. Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $13 per unit. Should the company accept or reject the offer? Complete this question by entering your answers in the tabs below. Net Accept or Income Reject Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $13 per unit. Normal Additional Combined Volume Volume Total Costs and expenses: Total costs and expenses Incremental income (loss) from new business Not Income Accept or Reject>

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