Calla Company produces skateboards that sell for $54 per unit The company currently has the capacity to produce 100,000 skateboards per year, but is selling 81,000 skateboards per year Annual costs for 81,000 skateboards follow Direct materials $ 826,200 Direct labor 623,700 Overhead 945,000 Selling expenses 553,000 Administrative expenses 462,000 Total costs and expenses $ 3,409,900 A new retail store has offered to buy 19,000 of its skateboards for $49 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 Direct materials and direct labor are 100 variable 50 percent of overhead is fixed at any production level from 81,000 units to 100,000 units the remaining 50 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 $3 00 per unit selling expense for this order Administrative expenses would increase by a $880 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 Calla accept this order 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 A CALLA COMPANY COMPARATIVE INCOME STATEMENTS Normal Volume Additional Volume Combined Total Sales Costs and expenses Direct materials Direct labor Overhead Selling expenses Administrative expenses 0 0 0 Total costs and expenses Operating income Required 1 Required 2 Should Calla accept this order Should Calla accept this order

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Calla Company produces skateboards that sell for $54 per unit. The company currently has the capacity to produce 100,000 skateboards per year, but is selling

Calla Company produces skateboards that sell for $54 per unit. The company currently has the capacity to produce 100,000 skateboards per year, but is selling 81,000 skateboards per year. Annual costs for 81,000 skateboards follow.


Direct materials	$	826,200
Direct labor		623,700
Overhead		945,000
Selling expenses		553,000
Administrative expenses		462,000
Total costs and expenses	$	3,409,900

A new retail store has offered to buy 19,000 of its skateboards for $49 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:

Direct materials and direct labor are 100% variable.
50 percent of overhead is fixed at any production level from 81,000 units to 100,000 units; the remaining 50% 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 $3.00 per unit selling expense for this order.
Administrative expenses would increase by a $880 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 Calla accept this order?

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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 A CALLA COMPANY COMPARATIVE INCOME STATEMENTS Normal Volume Additional Volume Combined Total Sales Costs and expenses: Direct materials Direct labor Overhead Selling expenses Administrative expenses 0 0 0 Total costs and expenses Operating income Required 1 Required 2 Should Calla accept this order? Should Calla accept this order