Fox, inc. manufactures and sells pens for $7 each. walton corp. has offered fox, inc. $3 per pen for a one-time order of 3,500 pens. the total manufacturing cost per pen, using absorption costing, is $1 per unit and consists of variable costs of $0.75 per pen and fixed overhead costs of $0.25 per pen. assume that fox, inc. has excess capacity and that the special pricing order would not adversely affect regular sales. what is the change in operating income that would result from accepting the special pricing order?

Harris fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. at the beginning of the year, it estimated that 34,000 direct labor-hours would be required for the period’s estimated level of production. the company also estimated $599,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. harris's actual manufacturing overhead for the year was $768,234 and its actual total direct labor was 34,500 hours.required: compute the company's predetermined overhead rate for the year. (round your answer to 2 decimal places.)