Pardo Company produces a single product and has capacity to produce 110,000 units per month. Costs to produce its current monthly sales of 88,000 units follow. The normal selling price of the product is $116 per unit. A new customer offers to purchase 22,000 units for $65.70 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales. Direct materials Direct labor Variable overhead Fixed overhead Fixed general and administrative Totals Per Unit $12.50 15.00 13.00 17.50 15.00 $73.00 Costs at 88,000 Units $1,100,000 Variable costs 1,320,000 1,144,000 1,540,000 1,320,000 $6,424,000 (a) Compute the income from the special offer (b) Should the company accept the special offer? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income for the special offer, (Round your "Per Unit" answers to 2 decimal places.) SPECIAL OFFER ANALYSIS Per Unit Total

Pardo Company produces a single product and has capacity to produce 110,000 units per month. Costs to produce its current monthly sales of 88,000 units follow. The normal selling price of the product is $116 per unit. A new customer offers to purchase 22,000 units for $65.70 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales. Direct materials Direct labor Variable overhead Fixed overhead Fixed general and administrative Totals Per Unit $12.50 15.00 13.00 17.50 15.00 $73.00 Costs at 88,000 Units $1,100,000 Variable costs 1,320,000 1,144,000 1,540,000 1,320,000 $6,424,000 (a) Compute the income from the special offer (b) Should the company accept the special offer? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income for the special offer, (Round your "Per Unit" answers to 2 decimal places.) SPECIAL OFFER ANALYSIS Per Unit Total

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EB: Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all...

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