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Exercise 23-14 (Algo) Special offer pricing LO P7 Pardo Company produces a single product and has capacity to produce 120,000 units per month. Costs to produce its current monthly sales of 96,000 units follow. The normal selling price of the product is $144 per unit. A new customer offers to purchase 24,000 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. Per Unit Costs at 96,000 Units Direct materials $ 12.50 $ 1,200,000 Direct labor 15.00 1,440,000 Variable overhead 14.00 1,344,000 Fixed overhead 17.50 1,680,000 Fixed general and administrative 14.00 1,344,000 Totals $ 73.00 $ 7,008,000 (a) Compute the income from the special offer. (b) Should the company accept the special offer?

Pardo Company produces a single product and has capacity to produce 120,000 units per month. Costs to produce its current monthly sales of 96,000 units follow. The normal selling price of the product is $144 per unit. A new customer offers to purchase 24,000 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. (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. Compute the income for the special offer. (Round your "Per Unit" answers to 2 decimal places.) Exercise 23-14 (Algo) Special offer pricing LO P7 Pardo Company produces a single product and has capacity to produce 120,000 units per month. Costs to produce its current monthly sales of 96,000 units follow. The normal selling price of the product is $144 per unit. A new customer offers to purchase 24,000 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. (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. Should the company accept the special offer? Should the company accept the special offer

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