Farrow Co. expects to sell 500,000 units of its product in the next period with the following results Sales (500,000 units) Costs and expenses $7,500,000 Direct materials Direct labor Overhead Selling expenses Administrative expenses 1,000,e0e 2,000,000 500,000 750,000 1,285,000 5,535,000 $1,965,000 Total costs and expenses Net income 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. 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. Additional Volume Combined Normal Volume Total Sales $ 7,500,000$ 650,000 8,150,000 Costs and expenses: 1,100,000 2,200,000 580,000 750,000 1,500,000 6,130,000 Incremental income (loss) from new business$1,965,00055,000$ 2,020,000 Direct materials Direct labor Overhead Selling expenses Administrative expenses 1,000,000 2,000,000 500,000 750,000 1,285,000 5,535,000 100,000 200,000 80,000 215,000 595,000 Total costs and expenses Should the company accept or reject the offer? O The company should accept the offer O The company should reject the offer