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part 1 part 2 Farrow Company reports the following annual results. Peetrit $15.00 Annual Total $ 5.000.000 Contribution Margin Income Statement Sales (400,000 units) Variable
part 1
Farrow Company reports the following annual results. Peetrit $15.00 Annual Total $ 5.000.000 Contribution Margin Income Statement Sales (400,000 units) Variable costs Direct materials Direct Labor Overhead Contribution margin Fixed casts Fixed overhead Fixed general and administrative Income 2.00 4.00 2.50 6.50 800,000 1.600.000 1.000.000 2,600,000 2.00 1.50 300.000 600.000 $1,200,000 $ 3.00 The company receives a special offer for 40.000 units at $13 per unit. The additional sales would not affect its normal sales. Variable costs per unit would be the same for the special offer as they are for the normal units. The special offer would require incremental fixed overhead of $160.000 and incremental fixed general and administrative costs of $172.000 (a) Compute the income or loss for the special offer (b) Should the company accept or reject the special offer? Complete this question by entering your answers in the tabs below Required A Required B Compute the income or loss for the special offer. (Round your "Per Unite answers to 2 decimal places. SVECUAL OFFER ANALYSIS Per un Total Contribution margin Income Farrow Company reports the following annual results Der Unit $ 15.00 Annual Total $ 6,000,000 Contribution Margin Income Statement Sales (400,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Fixed general and adeinistrative Income -2.00 4.00 2.50 6.5e 300,000 1,500,000 1.000.000 2,600.000 2.00 1.50 500,00 600,000 5 1,200,000 $ 3.00 The company receives a special offer for 40,000 units at $13 per unit. The additional sales would not affect its normal sales. Variable costs per unit would be the same for the special offer as they are for the normal units. The special offer would require incremental fixed overhead of 5160,000 and incremental foed general and administrative costs of 172.000 (n) Compute the income or loss for the special offer (b) Should the company accept or reject the special offer? Complete this question by entering your answers in the tabs below. Required A Required B Should the company accept or reject the special offer? Should the company accept or reject the special offer? part 2
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