special order

Goshford Company produces a single product and has capacity to produce 100,000 units per month Costs to produce is current sales of 80.000 units follow. The regular selling price of the product is $100 per unit. Management is approached by a new customer who wants to purchase 20,000 units of the product for $75.00 per unit. If the order is accepted, there will be no additional fored manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company's regular selling territory, so there will be a $5.00 per unit shipping expense in addition to the regular variable selling and administrative expenses. Costs at 80,000 Per Unit Units Direct materials $12.50 $1,000,000 15.00 1,200,000 Direct labor 10.00 800,000 Variable manufacturing overhead 17.50 1,400,000 Fixed manufacturing overhead 14.00 1.120.NO Variable selling and administrative expenses 13.00 1,000,000 Fixed selling and administrative expenses $82.00 $6,560,000 Totals Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $7500 per unit. Normal Volume Additional Volume Combined Total Costs and expenses Total costs and expenses Net income (loss) Determine whether management should accept or reject the new business o Accept Reject