Paramount travel gear produces backpacks and sells them to vendors who sell them under their own label. The cost of one of its backpacks follows:

Riverside Discount Mart, a chain of low price stores, has asked Fairmount to supply it with 37,000 backpacks for a special promotion in Riverside is planning. Riverside has offered to pay Fairmount a unit price of $54 per pack. The regular selling price is $78. The special order would require some modifications to the basic model. These modifications would add $5.80 per unit in the material cost, $3.30 per unit and labor cost, and $2.30 and variable overhead costs. Although Fairmount has the capacity who produced the 37000 units without affecting its regular production of 468000 units a one-time rental of special testing equipment to meet Riverside requirements would be needed the equipment rental would be $92,400 and would allow for much a test of 68000

units

Fairmount Travel Gear produces backpacks and sells them to vendors who sell them under their ow Materials Labor Variable overhead Fixed overhead (53,650,400 per year, 468,000 units per year) $19.80 13.80 6.80 7 80 Total 548 20 Riverside Discount Mart a chain of low price stores, has asked Fairmount to supply it with 37.000 t unit price of $54 per pack. The regular selling price is $78. The special order wouid require some n $3 30 per unit in labor cost and $2.:30 in variable overhead cost Although Fairmount has the ca one-time rentai of special testing equipment to meet Riverside's requirements would be needes 1 a. Prepare a schedule to show the impaet of fing the Rverside order on Faimontsprots 1 Required a. Prepare a schedule to show the impact of filting the Riverside order should be entered as 5,400.4), Select option "higher" or "lower", keeping Status Quo