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Pardo Company produces a single product and has capacity to produce 200,000 units per month. Costs to produce its current monthly sales of 160,000

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Pardo Company produces a single product and has capacity to produce 200,000 units per month. Costs to produce its current monthly sales of 160,000 units follow. The normal selling price of the product is $102 per unit. A new customer offers to purchase 40,000 units for $63.00 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales. Direct materials Direct labor Variable overhead Fixed overhead Fixed general and administrative Totals Costs at 160,000 Per Unit Units $ 12.50 $ 2,000,000 15.00 2,400,000 12.00 1,920,000 17.50 2,800,000 13.00 2,080,000 $ 70.00 $ 11,200,000 (a) Compute the income from the special offer. (b) Should the company accept the special offer? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income for the special offer. Note: Round your "Per Unit" answers to 2 decimal places. Sales SPECIAL OFFER ANALYSIS Variable costs Direct labor Direct materials Variable overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income Per Unit Total $ 102.00 15.00 2,400,000 12.50 2,000,000 12.00 1,920,000 62.50 6,320,000 0 0 $ 62.50 $ 6,320,000 < Required A Required B >

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