Miramar Tire and Rubber Company has capacity to produce 162,000 tires. Miramar presently produces and sells 124,000 tires for the North American market at a price of $107.00 per tire. Miramar is evaluating a special order from a South American automobile company, Rio Motors. Rio Motors is offering to buy 19,000 tires for $87.75 per tire. Miramars accounting system indicates that the total cost per tire is as follows:

Direct materials	$41
Direct labor	15
Factory overhead (60% variable)	25
Selling and administrative expenses (40% variable)	21
Total	$102

Miramar pays a sales commission equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $6.00 per tire. In addition, Rio has made the order conditional on Miramar Tire and Rubber Company receiving a Brazilian safety certification. Rio estimates that this certification would cost Miramar Tire $108,300.

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a. Prepare a differential analysis report for the proposed sale to Rio Motors. Round your answers to the nearest cent.

Miramar Tire And Rubber Company Sell to Rio Motors Differential Analysis Report

	Per Unit	Total
Differential revenue from accepting special offer	$fill in the blank e1ef0d047007017_1	$fill in the blank e1ef0d047007017_2
Differential costs from accepting special offer: (Enter per unit cost amounts as positive values; enter the per unit cost savings as a negative value).
Differential revenue from accepting special offerDirect materialsFactory overhead (total)Incremental certification costsSales commissionsDirect materials	$Direct materials
Differential revenue from accepting special offerDirect laborFactory overhead (total)Incremental certification costsSales commissionsDirect labor	Direct labor
Fixed factory overheadTotal factory overheadVariable factory overheadVariable factory overhead	Variable factory overhead
Total selling and administrativeFixed selling and administrativeVariable selling and administrativeVariable selling and administrative	Variable selling and administrative
Less avoided sales commissionPlus avoided sales commissionLess avoided sales commission	Less avoided sales commission
Additional shipping costsReduced shipping costsAdditional shipping costs	Additional shipping costs
Fixed special offer product costVariable special offer product costVariable special offer product cost	$Variable special offer product cost	$Variable special offer product cost
Incremental certification costsReduced certification costsIncremental certification costs		Incremental certification costs
Total differential costs		$fill in the blank e1ef0d047007017_20
Differential income from accepting special orderDifferential loss from accepting special orderDifferential income from accepting special order		$Differential income from accepting special order

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b. What is the minimum price per unit that would be financially acceptable to Miramar? Round your answer to the nearest cent. $fill in the blank cac418072fcdf9e_1