Pella has the capacity to make 100,000 windows. Pella is currently operating at 75% capacity. The windows usually sell for $20.00 each. Costs for each window follow:

Direct materials $ 5.00

Direct labor 3.00

Variable factory overhead 2.00

Fixed factory overhead 4.00

Total $14.00

Amazon has offered to buy 10,000 windows for $12.00 each for their new facilility. Pella should:

a. Accept the offer because the company will realize $40,000 in additional contribution margin

b. Accept the offer because the company will realize $20,000 in additional contribution margin.

c. Reject the offer because it currently does not have enough capacity to accept the order.

d. Reject the order because the company will lose $20,000 on the order.