Pardo Company produces a single product and has capacity to produce 125,000 units per month. Costs to produce its current monthly sales of 100,000 units follow. The normal selling price of the product is $134 per unit. A new customer offers to purchase 25,000 units for $66.60 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.

	Per Unit	Costs at 100,000 Units
Direct materials	$ 12.50	$ 1,250,000
Direct labor	15.00	1,500,000
Variable overhead	14.00	1,400,000
Fixed overhead	17.50	1,750,000
Fixed general and administrative	15.00	1,500,000
Totals	$ 74.00	$ 7,400,000

(a) Compute the income from the special offer. (b) Should the company accept the special offer?

Required A Required B Compute the income for the special offer. (Round your "Per Unit" answers to 2 decimal places.) SPECIAL OFFER ANALYSIS Per Unit Total Variable costs Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income Required A Required B Should the company accept the special offer? Should the company accept the special offer