Blossom Company produced and sold 62,000 units of product and is operating at 70% of plant capacity. Unit information about its product is as follows:

Sales price				$90
Variable manufacturing cost		$65
Fixed manufacturing cost ($620,000 62,000)		10		75
Profit per unit				$15

The company received a proposal from a foreign company to buy 8,600 units of Blossom Company's product for $70 per unit. This is a one-time only order and acceptance of this proposal will not affect the company's regular sales. The president of Blossom Company is reluctant to accept the proposal because he is concerned that the company will lose money on the special order.

Prepare a schedule reflecting an incremental analysis of this proposal. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Do not leave any field blank. Enter 0 for the amounts.)

BLOSSOM COMPANY Incremental Analysis Proposal to sell 8,600 units at $70
		Reject Order		Accept Order		Net Income Increase (Decrease)
select an item Net IncomeSalesCostsRevenuesFixed CostsNet Loss		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select an item SalesCostsNet LossFixed CostsNet IncomeRevenues		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a closing name Net IncomeNet LossRevenuesSalesCostsFixed Costs		$enter a total net income amount		$enter a total net income amount		$enter a total net income amount

Question Part Score

--/6

Indicate the effect the acceptance of this order might have on the company's income.

Blossom Company would select an option increasedecrease its income by $enter a dollar amount by accepting the special order.