Calla Company produces skateboards that sell for $62 per unit. The company currently has the capacity to produce 100,000 skateboards per year, but is selling 80,600 skateboards per year. Annual costs for 30,600 skateboards follow. Direct materials Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses $830, 180 612,560 952,ese 544,000 462, eee $3,480,740 A new retail store hes offered to buy 19.400 of its skateboards for $57 per unit. The store is in a different market from Colls's regular customers and would not affect reguler 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 overhesd is fixed at any production level from 80.600 units to 100.000 units: the remaining 70% of annual overhead costs are variable with respect to volume. Selling expenses are 80% variable with respect to number of units sold, and the other 20% of selling expenses are fixed. There will be an additional $2.60 per unit selling expense for this order. Administrative expenses would increase by a $940 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 Colle 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 CALLA COMPANY COMPARATIVE INCOME STATEMENTS Normal Volume Additional Volume Combined Total Sales Casts and expenses Total costs and expenses Operating income Calls Ampany produces skateboards thet sell for $62 per unit. The company currently has the capacity to produce 100.000 skateboards per year, but is selling 80,600 skateboards per yesr. Annual costs for 30,600 skateboards follow. Direct materials Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses $ 330,180 612,560 952.000 544,00 462,22e $3,489,740 A new retail store has offered to buy 19.400 of its skateboards for $57 per unit. The store is in a different market from Colle's regulo 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 80,600 units to 100.000 units; the remaining 70% of annual overhe costs are variable with respect to volume. Selling expenses are 80% variable with respect to number of units sold, and the other 20% of selling expenses sre fixed. There will be an additional $2.60 per unit selling expense for this order. Administrative expenses would increase by a $940 fixed emount. 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 Colls 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 accept this order?
