Jones Products manufactures and sells to wholesalers approximately 200,000 packages per year of package. Annual costs for the production and sale of this quantity are shown in the table. Direct materials Direct labor 64,000 192,000 80,800 53,000 645,000 Administrative expenses Total costs and expenses A new wholesaler has offered to buy 33,000 packages for $3.33 each. These markers would be marketed under the wholesaler's name and would not affect Jones Products' sales through its normal channels. A study of the costs of this additional business reveals the following: * Direct materials costs are 100% variable. Per unit direct labor costs for the additional units would be 50% higher than normal because their production would require overtime pay at 1'2 times the usual labor rate. 35% of the normal annual overhead costs are fixed at any production level from 150,000 to 300,000 units. The remaining 65% of the annual overhead cost is variable with volume. . Accepting the new business would involve no additional selling expenses. ormal Normal New Sales Variable costs: Fixed costs