3.

Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high-profile celebrity and designed with special elements selected by the celebrity. During the most recent year, Camino Company had the following operating results while operating at 80 percent (96,000 units) of its capacity: Sales revenue $960,000 Cost of goods 492,000 sold Gross profit Operating expenses Net operating income $468,000 36,000 $432,000 Camino's cost of goods sold and operating expenses are 80 percent variable and 20 percent fixed. Camino has received an offer from a professional wrestling association to design a coffee cup endorsed by its biggest star and produce 20,000 cups for $8 each (total $160,000). These cups would be sold at wrestl ing matches throughout the United States. Acceptance of the order would require a $60,000 endorsement fee to the wrestling star, but no other increases in fixed operating expenses. Required: 1. Complete the incremental analysis of the special order in the table provided below. (Enter per unit answers to 2 decimal places.) Per cup Total Incremental Revenue Less: Incremental Costs Variable COGS Variable Operating Expenses Endorsement Fee Incremental Profit 2. Should Camino accept this special order? Yes ONo 3. If Camino were operating at full capacity, what price would Camino require for the special order? Price per Cup