Farrow Company reports the following annual results. Contribution Margin Income Statement Sales (400,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income (a) Compute the income or loss for the special offer. (b) Should the company accept or reject the special offer? Required A Required B Per Unit $ 15.00 Sales Variable costs 2.00 4.00 2.50 6.50 2.00 1.50 $ 3.00 The company receives a special offer for 40,000 units at $12 per unit. The additional sales would not affect its normal sa costs per unit would be the same for the special offer as they are for the normal units. The special offer would require in fixed overhead of $160,000 and incremental fixed general and administrative costs of $172,000. Direct materials Direct labor Variable overhead $ Complete this question by entering your answers in the tabs below. Annual Total $ 6,000,000 Compute the income or loss for the special offer. (Round your "Per Unit" answers to 2 decimal places.) SPECIAL OFFER ANALYSIS 800,000 600,000 $ 1,200,000 Per Unit 800,000 1,600,000 1,000,000 2,600,000 12.00 2.00 4.00 2.50 $ Total 480,000 80,000 160,000 100 000

Farrow Company reports the following annual results. The company receives a special offer for 40,000 units at $12 per unit. The additional sales would not affect its normal s costs per unit would be the same for the special offer as they are for the normal units. The special offer would require fixed overhead of $160,000 and incremental fixed general and administrative costs of $172,000. (a) Compute the income or loss for the special offer. (b) Should the company accept or reject the special offer? Complete this question by entering your answers in the tabs below. Compute the income or loss for the special offer. (Round your "Per Unit" answers to 2 decimal places.)