Incremental Analysis calculation:

Missoula Industries manufactures a product with the following costs per unit at the expected production of 30,000 units:

Direct materials$5

Direct labor15

Variable manufacturing overhead8

Fixed manufacturing overhead6

The company has the capacity to produce 60,000 units. The product regularly sells for $45. A wholesaler has offered to pay $40 each for 2,000 units.

Required:

Based on your analysis, advise management whether to accept or reject the special order.( Show with calculations)