| Rome Metals Cost Breakdown | Per Unit |
| Direct materials | $8 |
| Direct labor | $45 |
| Variable overhead | $9 |
| Fixed overhead | $14 |
| Shipping Cost | $2 |
| Total Per Unit | $78 |
Rome Metals a US based firm located in Rome, Georgia makes metalbrackets used in the construction of warehouse shelving. The firmhas a practical capacity of 42,000 units and for the past severalyears has produced at a constant volume of 35,000 units/year. RomeBrackets are priced at $92/unit. The manufacturing costs incurredto make a bracket at the 35,000 unit level is shown above. Notethat the $2/unit shipping cost is included in the manufacturingcosts breakdown. An order for 10,000 has been received from a newcustomer - Fedex Logistics Services - but at a required price ofonly $78/unit. Fedex has agreed to pick up the order from the Romefacility itself saving Rome Metals the shipping fee. Due to capitalconstraints Rome Metals cannot adjust its practical capacity nordoes the firm have any potential outsourcing partners. Assuming noloss of existing customer goodwill, should Rome Metals accept theoffer from Fedex Logistics Services.
a) Yes, Rome Metals Profit will Increase by $154,000
b) Yes, Rome Metals Profits will Increase by $160,000
c) Yes, Rome Metals Profits will Increase by $76,000
d) No, Rome Metals Profits Will Be Reduced by $70,000
e) Yes, Rome Metals Profits Will Increase by $70,000
f) No, Rome Metals Profits Will be reduced by $30,000
