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Caramia Company manufactures facial products. For the first eight months of 2015, the company reported the following operating results while operating at 90% of plant
Caramia Company manufactures facial products. For the first eight months of 2015, the company reported the following operating results while operating at 90% of plant capacity: Sales (500,000 units)$80,000,000 Cost of goods sold 64,000,000 Gross profit16,000,000 Operating expenses 9,000,000 Net income$7,000,000 An analysis of costs and expenses reveals that variable cost of goods sold is $45 per unit and variable operating expenses are $35 per unit. In September, Caramia Company receives a special order for 40,000 cases of its product at $80 each for a favored lipstick brand. Acceptance of the order would result in $15,000 of shipping costs and a small increase in fixed expenses of $500. Required 1
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