Fromherz Company produced and sold 50,000 units of product and is operating at 80% of plant capacity. Unit information about its product is as follows:

Sales Price

Variable manufacturing cost

LE 68

LE 42

Fixed manufacturing cost (LE 500,000+ 50.000) 10

Profit per unit

52

LE 16

The company received a proposal from a Danish company to buy 10,000 units of Fromherz Company's product for LE 49 per unit. This is a one-time only order and acceptance of this proposal will not affect the company's regular sales. The president of Fromherz Company is reluctant to accept the proposal because he is concerned that the company will lose money on the special order.

Instructions

Prepare a schedule reflecting an incremental analysis of this proposal and indicate the effect the acceptance of this order might have on the company's income.