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Goshford Company produces a single product and has capacity to produce 190,000 units per month. Costs to produce its current soles of 152,000 units follow.

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Goshford Company produces a single product and has capacity to produce 190,000 units per month. Costs to produce its current soles of 152,000 units follow. The regular selling price of the product is $144 per unit. Management is approached by a new customer who wants to purchase 38,000 units of the product for $78,30 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company's regular seling territory, so there will be a $6.20 per unit shipping expense in addition to the regular variable selling and administrative expenses Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Totals Per Unit $12.50 15.00 12.00 17.50 15.00 15.00 $87.00 costs at 152,000 units $ 1,900,000 2.280,000 1,824,000 2,560,000 2,280,000 2.280,000 $13, 224,000 Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $78.30 per unit. Determine whether management should accept or reject the new business. Complete this question by entering your answers in the tabs below. Homework Saved You received partial credit in the previous attempt. Net Income Accept or Reject Calculate the combined total net income of the company accepts the offer to sell additional units at the reduced price of $78.30 per unit. Normal Volume Additional Volume Combined Total $ 0 1,900,000 2,280,000 1,824,000 Sales Costs and expenses. Direct materials Direct labor Variable manufacturing overhead Variable selling and admin. exp Fixed manufacturing overhead Fixed selling and admin. exp Total costs and expenses Total costs and expenses Net income (loss) 1,900,000 2,280.000 1,824,000 0 0 2 280,000 13,224,000 21,508,000 $ (21,508,000) 2,280,000 13,224,000 21,508,000 $ (21,508,000) $ 0 0

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