Integrated Masters Inc. (IMI) is presently operating at 80% of capacity and manufacturing 115,000 units of a patented electronic component. The cost structure of the component is as follows:

Raw materials	$	7.70	per unit
Direct labor		7.70	per unit
Variable overhead		9.70	per unit
Fixed overhead	$	529,000	per year

An Italian firm has offered to purchase 21,700 of the components at a price of $32.5 per unit, FOB IMI's plant. The normal selling price is $37.1 per component. This special order will not affect any of IMI's "normal" business. Management calculated that the cost per component is $29.7, so it is reluctant to accept this special order. Required:

1. Calculate the fixed overhead per unit?
2. Is the cost calculation appropriate?
3. Should the offer from the Italian firm be accepted?