Problem 2 ADDITIONAL BUSINESS (10 points) Generalare, Inc. sells a single product and reports the following results from sales of 100,090 units: Sales ($45 unit) $4,500,000 Less costs and expenses: Direct materials ($16/unit) $1.600,000 Direct labor ($9/unit) 900,000 Variable overhead ($3/unit) 300,000 Fixed overhead ($8.10/unit) 810,000 Total costs and expenses ($3,610,000) Operating income $890,000 A new customer wants to purchase 25,000 units. However, they are willing to pay only $37 per unit for this one-time order. To fill the order, Generalware will incur normal production costs. Total fixed overhead will have to be increased by $80,000 to pay for equipment rentals and insurance. Generalware has the capacity to produce the additional units. (a) Calculate the incremental operating income from accepting the new business. (Hint: Calculate incremental income from the order.) Show your work! (b) Should Generalware accept or reject the new business? Why