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Goshford Company produces a single product and has capacity to produce 125,000 units per month....

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Accounting

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Goshford Company produces a single product and has capacity to produce 125,000 units per month. Costs to produce its current sales of 100,000 units follow. The regular selling price of the product is $118 per unit. Management is approached by a new customer who wants to purchase 25,000 units of the product for $81.00 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company's regular selling territory, so there will be a $740 per unit shipping expense in addition to the regular variable selling and administrative expenses Costs at 100,000 Units $1,250,000 1,500,000 1,400,008 1,750,000 1,600,000 1,500,000 $9,000,000 Per Unit $12.50 15.00 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses 14.00 17.50 16.00 15.00 $90.00 Totals Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $81.00 per unit. Combined Total Additional Volume Normal Volume S 0 Costs and expenses 0 01

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