Farrow co. expects to sell 150,000 units of its product in the next period with the following results. sales (150,000 units)$2,250,000 costs and expenses direct materials 300,000 direct labor 600,000 overhead 150,000 selling expenses 225,000 administrative expenses 385,500 total costs and expenses 1,660,500 net income$589,500 the company has an opportunity to sell 15,000 additional units at $12 per unit. the additional sales would not affect its current expected sales. direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. however, the additional volume would create the following incremental costs: (1) total overhead would increase by 15% and (2) administrative expenses would increase by $64,500. calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $12 per unit.

Prepare the operating activities section—indirect method.(lo 4), apthe income statement of paxson company is presented here.paxson companyincome statementfor the year ended november 30, 2014sales revenue $7,600,000cost of goods sold beginning inventory$1,900,000 purchases4,400,000goods available for sale6,300,000 ending inventory1,600,000total cost of goods sold 4,700,000gross profit 2,900,000operating expenses selling expenses450,000 administrative expenses700,0001,150,000net income $1,750,000additional information: prepare the operating activities section—indirect 1. accounts receivable decreased $380,000 during the year, and inventory decreased $300,000.2. prepaid expenses increased $150,000 during the year.3. accounts payable to suppliers of merchandise decreased $350,000 during the year.4. accrued expenses payable decreased $100,000 during the year.5. administrative expenses include depreciation expense of $110,000.instructionsprepare the operating activities section of the statement of cash flows for the year ended november 30, 2014, for paxson company, using the indirect method.net cash provided $1,940,000