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Anchor Company manufactures a variety of tool boxes. The firm is currently operating at 80% of its full capacity of 4.650 machinehours per month. Each

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Anchor Company manufactures a variety of tool boxes. The firm is currently operating at 80% of its full capacity of 4.650 machinehours per month. Each unit requires 30 minutes of machine time. Its sales manager has been looking for speclal orders to make productive use of the excess capacity. JCL Ltd., a potential customer, has offered to buy 10,000 tool boxes at $8.30 per box, provided Botn tixed and variable overhead are allocated using direct labour-hours as a base. Variable overhead is $1.70 per direct labour-hour. Without the order. Anchor would have enough business to operate at 3,720 direct labour-hours in each of the next two mononths. The paid on this special order. Anchor has a policy against it. JCL will not acce the labour time that 10,000 boxes would require. She cannot schedule overtime because necessary for Anchor Company to divert some of its regular sales to the boxes. Therefore, in order to fill the special order, it would be Required: 1-a. Prepare contribution margin income statements for the two-month period both with and without the special order. (Leove no cells blank be certain to enter "O" wherever required.) Anchor Company manufactures a variety of tool boxes. The firm is currently operating at 80% of its full capacity of 4.650 machinehours per month. Each unit requires 30 minutes of machine time. Its sales manager has been looking for speclal orders to make productive use of the excess capacity. JCL Ltd., a potential customer, has offered to buy 10,000 tool boxes at $8.30 per box, provided Botn tixed and variable overhead are allocated using direct labour-hours as a base. Variable overhead is $1.70 per direct labour-hour. Without the order. Anchor would have enough business to operate at 3,720 direct labour-hours in each of the next two mononths. The paid on this special order. Anchor has a policy against it. JCL will not acce the labour time that 10,000 boxes would require. She cannot schedule overtime because necessary for Anchor Company to divert some of its regular sales to the boxes. Therefore, in order to fill the special order, it would be Required: 1-a. Prepare contribution margin income statements for the two-month period both with and without the special order. (Leove no cells blank be certain to enter "O" wherever required.)

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