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2 Calla Company produces skateboards that sell for $65 per unit. The company currently has the capacity to produce 95,000 skateboards per year, but is

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2 Calla Company produces skateboards that sell for $65 per unit. The company currently has the capacity to produce 95,000 skateboards per year, but is selling 80,100 skateboards per year. Annual costs for 80,100 skateboards follow. $ 3:21:17 Direct materials Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses 857,070 664,830 949,000 540,000 461,000 $3,471,900 ook A new retail store has offered to buy 14,900 of its skateboards for $60 per unit. The store is in a different market from Calla's regular customers and would not affect regular sales. A study of its costs in anticipation of this additional business reveals the following: rint Direct materials and direct labor are 100% variable. . 40 percent of overhead is fixed at any production level from 80,100 units to 95,000 units; the remaining 60% of annual overhead costs are variable with respect to volume. Selling expenses are 60% variable with respect to number of units sold, and the other 40% of selling expenses are fixed. There will be an additional $1.80 per unit selling expense for this order. Administrative expenses would increase by a $990 fixed amount. Required: 1. Prepare a three-column comparative income statement that reports the following: a. Annual income without the special order. b. Annual income from the special order. c. Combined annual income from normal business and the new business. 2. Should Callo accept this order? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prey 12 of 12 !!! Next accept this or Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a three-column comparative income statement that reports the following: a. Annual income without the special order. b. Annual income from the special order. c. Combined annual income from normal business and the new business. (Do not round your intermediate calculations. Round your cost and expenses to nearest whole number.) Show less CALLA COMPANY COMPARATIVE INCOME STATEMENTS Normal Volume Additional Volume Combined Total 857,070 65 14,900 60 871,970 125 Costs and expenses: Direct materials Direct labor Overhead Selling expenses Administrative expenses 857,135 14,960 872,095 Total costs and expenses Operating income Direct materials and direct labor are 100% variable. 40 percent of overhead is fixed at any production level from 80,100 units to 95,000 units; the remaining 60% of annual overhe costs are variable with respect to volume. Selling expenses are 60% variable with respect to number of units sold, and the other 40% of selling expenses are fixed. There will be an additional $1.80 per unit selling expense for this order. Administrative expertses would increase by a $990 fixed amount. 3:21:06 Required: 1. Prepare a three-column comparative income statement that reports the following: ok a. Annual income without the special order. b. Annual income from the special order. c. Combined annual income from normal business and the new business, 2. Should Calla accept this order? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should Calla accept this order? Should Calla accept this order?

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