Thanos company's total production capacity is 4,500 units per month. Currently, the company plans to makeand sell 4,000 units per month for the next 12 months. The company's sales manager, Mr. T, received anoffer from a new customer to purchase 475 units at $96 per unit for the next five months. He is reluctantto accept this offer, because the normal selling price is $105. Also, the company's absorption costing system showsthat manufacturing costs are $80 per unit, and selling costs are $16 per unit. The sales manager is concerned that thelow offer price will not help the company cover its high manufacturing fixed costs.

Q:) Should the company accept the offer?

A:)

• No, because the company will only break even on this offer.
• Yes, because excess capacity will decrease.
• Yes, because operating income will most likely increase.
• No, because the company's ROI will most likely decrease.
• All of the other answers are incorrect.