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JART manufactures and sells underwater markers. Its contribution margin income statement follows. Contribution Margin Income Statement For Year Ended December 31 Per Unit Annual Total

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JART manufactures and sells underwater markers. Its contribution margin income statement follows. Contribution Margin Income Statement For Year Ended December 31 Per Unit Annual Total Sales (550,000 units) $ 7.00 $ 3,850,000 Variable costs Direct materials 1.59 874,500 Direct labor 0.41 225,500 Variable overhead 0.90 495,000 Contribution margin 4.10 2,255,000 Fixed costs Fixed overhead 0.20 110,000 Fixed general and administrative 0.15 82,500 Income $ 3.75 $ 2,062,500 A potential customer offers to buy 65,000 units for $3.70 each. These sales would not affect the company's sales through its normal channels. Details about the special offer follow. Direct materials cost per unit and variable overhead cost per unit would not change. Direct labor cost per unit would be $0.59 because the offer would require overtime pay Accepting the offer would require incremental fixed general and administrative costs of $6,500. Accepting the offer would require no incremental fixed overhead costs. Required: 1. Compute income from the special offer. 2. Should the company accept or reject the special offer? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute income from the special offer. (Round your "Per Unit" answers to 2 decimal places.) Special Offer Analysis Per Unit Total Sales Variable costs Direct materials 1.59 Direct labor Variable overhead 0.90 >> (2.49) 0 Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income (loss) $ (2.49) 0 Roquired Required 2 > Return to question Accepting the offer would require no incremental fixed overhead costs. 0: Required: 1. Compute income from the special offer. 2. Should the company accept or reject the special offer? Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should the company accept or reject the special offer? Should the company accept or reject the special offer?

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