Problem 10-5A (Algo) Special offer pricing LO P7 JART manufactures and sells underwater markers. Its contribution margin income statement follows. Sales (460,000 units) Variable costs Direct materials Direct labor For Year Ended December 31 Contribution Margin Income Statement Per Unit $6.00 Annual Total $2,760,000 1.45 0.25 667,000 115,000 0.70 322,000 3.60 1,656,000 0.30 138,000 0.25 Incone $ 3.05 Variable overhead Contribution margin Fixed costs Fixed overbead Fixed general and administrative 115,000 $1,403,000 A potential customer offers to buy 56,000 units for $3.00 each. These sales would not affect the company's sales through its normal channels. Details about the special offer follow. Direct materials cost per unit and variable overhead cost per unit would not change. Direct labor cost per unit would be $0.33 because the offer would require overtime pay Accepting the offer would require incremental fixed general and administrative costs of $5,600 Accepting the offer would require no incremental fixed overhead costs. Required: 1. Compute income from the special offer. 2. Should the company accept or reject the special offer?