The Engine Guys produces specialized engines for "snow climber" buses. The company's normal monthly production volume is 7,500 engines, whereas its monthly production capacity is 15,000 engines. The current selling price per engine is $1,150. The cost per unit of manufacturing and marketing the engines at the normal volume is as follows: Costs per Unit for Engines Manufacturing costs: Direct materials Direct labour Variable overhead Fixed overhead $102 184 184 501 31 Subtotal Marketing costs Variable Fixed $ 58 127 185 $ 686 Subtotal Total unit cost Required Answer the following independent questions 1-a. The Provincial Bus Company wishes to purchase 710 engines in October. The bus company is willing to pay a fixed fee of $900,000 and reimburse The Engine Guys for all manufacturing costs incurred to manufacture 710 motors. October is a busy month for The Engine Guys, and there are sufficient orders to operate at 100% capacity utilization. There will be no variable marketing costs on this government contract. Compute the incremental benefit of the contract. Incremental benefit of the contract 1-b. Indicate whether the Provincial Bus Company's contract should be accepted Yes 0