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JART manufactures and sells underwater markers. Its contribution margin income statement follows. Sales (480,000 units) Variable costs Direct materials Direct labor Contribution Margin Income
JART manufactures and sells underwater markers. Its contribution margin income statement follows. Sales (480,000 units) Variable costs Direct materials Direct labor Contribution Margin Income Statement For Year Ended December 31 Per Unit $ 7.00 Annual Total $ 3,360,000 1.52 729,600 0.38 182,400 0.70 336,000 4.40 2,112,000 0.30 144,000 0.20 $ 3.90 96,000 $ 1,872,000 Variable overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income A potential customer offers to buy 58,000 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 $0.56 because the offer would require overtime pay. . Accepting the offer would require incremental fixed general and administrative costs of $5,800. Accepting the offer would require no incremental fixed overhead costs. Required: 1. Compute income from the special offer.
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