Garcia Company has the following information available:

Units Sold 30,000

Current Selling Price $20.00

Current Variable Cost Per Unit $12.00

Fixed Costs $200,000

A new customer has offered to purchase an additional 6,000 units but wants to pay only $12.00 per unit. The variable cost will be reduced by $2.00 per unit due to no commissions being paid on this order. The special order will take an additional cost of $5,000 in special packaging and delivery costs.

Required

• Prepare an income statement using the current information
• Prepare an income statement on the special order
• Should the company accept the special order? Explain your answer.

	Current	Special Order
Sales
Variable Costs
Contribution Margin
Fixed Costs
Net Income

Should the company accept the special order? Explain your answer with numbers.