Calla Company produces skateboards that sell for $60 per unit. The company currently has the capacity to produce 90,000 skateboards per year, but is selling 81,800 skateboards per year . Annual costs for 81,800 skateboards follow. Direct materials Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses 916,160 736,200 958,000 552,000 479,000 $3,641,360 A new retail store has offered to buy 8,200 of its skateboards for $55 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 30 percent of overhead is fixed at any production level from 81,800 units to 90,000 units, the remaining 70% of annual overhead costs are variable with respect to volume. Selling expenses are 70% variable with respect to number of units sold, and the other 30% of selling expenses are fixed. There will be an additional $180 per unit selling expense for this order Administrative expenses would increase by a $890 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 Collo accept this order? Complete this question by entering your answers in the tabs below. Rand Raasid 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 CALLA COMPANY COMPARATIVE INCOME STATEMENTS Normal Volume Additional Volume Combined Total Costs and expenses Total costs and expenses Operating incomo Required 2 dre aflable with respect to volume. Selling expenses are 70% variable with respect to number of units sold, and the other 30% of selling expenses are fixed. There will be an additional $1.80 per unit selling expense for this order. Administrative expenses would increase by a $890 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 Should Calla accept this order? Should Calla scoopt this order?
