JART manufactures and sells underwater markers

Subject:BusinessPrice: Bought3

Share With

JART manufactures and sells underwater markers. Its contribution margin income statement follows Annual Total $ 3,ese, eee Contribution Margin Income Statement For Year Ended December 31 Per unit Sales (440,Bee units) $7.ee Variable costs Direct materials 1.48 Direct Labor e.52 Variable overhead 8.7 Contribution sargin 4.30 Fixed costs Fixed overhead 8.30 Fixed general and administrative 8.25 Income $ 3.75 651, 2ee 228,800 308, cee 1,892,000 132, 110,000 $1,650, eee A potential customer offers to buy 54,000 units for $3.70 each These sales would not affect the company's sales through its norma channels Details about the special offer follow Direct materials cost per unit and variable overhead cost per unit would not change - Direct labor cost per unit would be $0.65 because the offer would require overtime pay • Accepting the offer would require incremental fixed general and administrative costs of $5,400 Accepting the offer would require no incremental fixed overhead costs. Required: 1. Compute income from the special offer. 2. Should the company accept or reject the special offer? Pequired 1 Required 2 Compute income from the special offer. (Round your "Per Unit" answers to 2 decimal places.) Special Offer Analysis Per Unit Total Contribution margin 0.00 0 Fixed overhead Fixed general and administrative Income (loss) $ 0.00 5 Required 2 > quired: Compute Income from the special offer. Should the company accept or reject the special offer? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should the company accept or reject the special offer? Should the company accept or reject the special offer? < Required 1 RA