Carmen manufactures a unit called A2. Variable manufacturing costs per unit of A2 are as follows:Direct materials$1Direct labor$10Variable manufacturing overhead$5The Don Company has offered to sell Carmen 5,000 units of A2 for $22 per unit. If Carmen accepts the offer, $70,000 of fixed manufacturing overhead will be eliminated.Applying differential analysis to the situation, what should Carmen do? Support your answers with the calculations you used to make your decision.

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Carmen manufactures a unit called A2. Variable manufacturing costs per unit of A2 are as follows:Direct materials$1Direct labor$10Variable manufacturing overhead$5The Don Company has offered to sell Carmen 5,000 units of A2 for $22 per unit. If Carmen accepts the offer, $70,000 of fixed manufacturing overhead will be eliminated.Applying differential analysis to the situation, what should Carmen do? Support your answers with the calculations you used to make your decision.

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