Pardo Company produces a single product and has capacity to produce 175,000 units per month. Costs to produce its current monthly sales of 140,000 units follow. The normal selling price of the product is $118 per unit. A new customer offers to purchase 35,000 units for $63.90 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixe general and administrative costs. The special offer would not affect its normal sales. Direct materials Per Unit $ 12.50 15.00 13.00 17.50 13.00 $ 71.00 Direct labor Variable overhead Fixed overhead Fixed general and administrative Totals (a) Compute the income from the special offer. (b) Should the company accept the special offer? Costs at 140,000 Units $ 1,750,000 2,100,000 1,820,000 2,450,000 1,820,000 $ 9,940,000