Q5

Sparrow Rollers Company produces bikes. Each bike has the following costs: Note: The fixed manufacturing overhead is common to the company. The production capacity is 375.000 units per year. However, Sparrow Rollers expects to produce only 250, 000 units for the coming year. The company also has fixed selling costs of dollar566, 000 per year and variable selling costs of dollar 4 per unit sold. Each bike normally sells for dollar48 each. Recently, a customer offered to buy 55;000 bikes at a special price of S28 each. This order would not have any variable selling costs because no sales commissions are involved. Based on a quantitative analysis, should the company accept the special order? Do not enter dollar signs or commas in the input boxes. Use the negative sign for values that must be subtracted and negative values. Total Revenues dollar Total Direct Materials dollar Total Direct Labor dollar Total Variable Overhead dollar Incremental Operating Income dollar The special order should be