Problem 9-15 Determining Whether to Accept a Special Order and Whether to Make or Buy (L01 - CC4, 5) The Engine Guys produces specialized engines for "snow climber" buses. The company's normal monthly production volume is 9,000 engines, whereas its monthly production capacity is 18,000 engines. The current selling price per engine is $1,300. The cost per unit of manufacturing and marketing the engines at the normal volume is as follows: Costs per Unit for Engines Manufacturing costs S 108 Direct materials Direct laboun Variable overhead Fixed overhead 208 208 $ 558 34 Subtotal Marketing costs $ 65 Variable Fixed 143 208 S 766 Subtotal Total unit cost Required Answer the following independent questions 1-a. The Provincial Bus Company wishes to purchase 740 engines in October. The bus company is willing to pay a fixed fee of $1,080,000 and reimburse The Engine Guys for all manufacturing costs incurred to manufacture 740 motors. October is a busy month for The Engine Guys, and there are sufficient orders to operate at 100% capacity utilization. There will be no variable marketing costs on this government contract. Compute the incremental benefit of the contract. Incremental benefit of the contract