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Before Oriole could give Langston's Landscape Company an answer, the company received a special order from Benson Building & Supply for 14,800 fireplaces. Benson
Before Oriole could give Langston's Landscape Company an answer, the company received a special order from Benson Building & Supply for 14,800 fireplaces. Benson is willing to pay $67 per fireplace but it wants a special design imbedded into the fireplace that increases cost of goods sold by $60,680. The special design also requires the purchase of a part that costs $4,500 and will have no future use for Oriole Company. Benson Building & Supply will pick up the fireplaces so no shipping costs are involved. Due to capacity limitations, Oriole cannot accept both special orders. Which order should be accepted? Document your decision by preparing an incremental analysis for Benson's order. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Revenues Costs Cost of Goods Sold Operating Expenses Unique part Net Income +A Reject order CA Accept order Net Income Increase (Decrease) 991600 991600 (851000) (851000) (103,600) (4,500) (103,600) (4,500) +A $ $ 32,500 $ 32,500
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