Q1. Farrow Company

(a) Compute the income or loss for the special offer.

(b) Should the company accept or reject the special offer?

Farrow Company reports the following annual results. The company recelves a special offer for 20,000 units at $13 per unit. The additional sales would not affect its normal sales. Varlable 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 $80,000 and incremental fixed general and administrative costs of $86,000. Compute the income or loss for the special offer. Note: Round your "Per Unit" answers to 2 decimal places