Irrigation Products has offered to sell 20,000 filters to Filtration for $18 per filter. If...

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Accounting

Irrigation Products has offered to sell 20,000 filters to Filtration for $18 per filter. If Filtration accepts Irrigation Products offer, the facilities used to manufacture filters could be used to produce refrigerator filtration units. Revenues from the sale of refrigerator filtration units are estimated at $56,000, with variable costs amounting to 50% of sales. In addition, $1 per unit of the fixed overhead associated with the manufacture of secondary water irrigation filters could be eliminated.

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