Special Order

Tobitzu TV produces wall mounts for flat panel television sets. The forecasted income statement for $2009$ is as follows:

TOBITZU TV

Budgeted Income Statement

For the Year $2009$

Sales $($$$46$ per unit$)$ $$4,600,000$

Cost of good sold $($$$32$ per unit$)(3,200,000)$

Gross profit $1,400,000$

Selling expenses $($$$5$ per unit$)(500,000)$

Net income $$900,000$

Additional Information

$(1)$ Of the production costs and selling expenses, $$800,000$ and $$100,000,$ respectively, are fixed. $(2)$ Tobitzu TV received a special order from a hospital supply company offering to buy $14,000$ wall mounts for $$30.$ If it accepts the order, there will be no additional fixed selling expenses, and there is currently sufficient excess capacity to fill the order. The company's sales manager argues for rejecting the order because $"$we are not in the business of paying $$32$ to make a product to sell for $$30."$

Do you think the company should accept the special order?

Compute the contribution per unit and total contribution for the special order.

Contribution per unit. Note: Round answer to two decimal places.

$Answer

Total contribution

$Answer