Jackson Company produces a single product and has capacity to produce 175,000 units per month. Costs to produce its current monthly sales of 140,000 units follow. The normal selling price of the product is $150 per unit. A new customer offers to purchase 35,000 units for $66.60 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales.

	Per Unit	Costs at 140,000 Units
Direct materials	$ 12.50	$ 1,750,000
Direct labor	15.00	2,100,000
Variable overhead	14.00	1,960,000
Fixed overhead	17.50	2,450,000
Fixed general and administrative	15.00	2,100,000
Totals	$ 74.00	$ 10,360,000

How much is the contribution margin and should Jackson Company accept the special order?

	a.	The contribution margin is $475,000 and they should accept the special order
	b.	The contribution margin is $878,500 and they should accept the special order
	c.	The contribution margin is negative $175,000 and they should reject the special order
	d.	The contribution margin is negative $241,375 and they should reject the special order