Carney Company manufactures cappuccino makers. For the first eight months of 2016, the company reported the following operating results while operating at 80% of plant capacity:

Sales (500,000 units)		$90,000,000
Cost of goods sold		54,000,000
Gross profit		36,000,000
Operating expenses		24,000,000
Net income		$12,000,000

An analysis of costs and expenses reveals that variable cost of goods sold is $95 per unit and variable operating expenses are $35 per unit. In September, Carney Company receives a special order for 40,000 machines at $135 each from a major coffee shop franchise. Acceptance of the order would result in $10,000 of shipping costs but no increase in fixed expenses.

Anna Garden recently opened her own basketweaving studio. She sells finished baskets in addition to the raw materials needed by customers to weave baskets of their own. Anna has put together a variety of raw material kits, each including materials at various stages of completion. Unfortunately, owing to space limitations, Anna is unable to carry all varieties of kits originally assembled and must choose between two basic packages The basic introductory kit includes undyed, uncut reeds (with dye included) for weaving one basket. This basic package costs Anna $14 and sells for $33. The second kit, called Stage 2, includes cut reeds that have already been dyed. With this kit the customer need only soak the reeds and weave the basket. Anna is able to produce the second kit by using the basic materials included in the first kit and adding one hour of her own time, which she values at $28 per hour. Because she is more efficient at cutting and dying reeds than her average customer, Anna is able to make two kits of the dyed reeds, in one hour, from one kit of undyed reeds. The Stage 2 kit sells for $42 Your answer is partially correct. Try again. Prepare an incremental analysis for the Anna's basketweaving studio. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Sell (Basic Kit) Net Income Increase (Decrease) Process Further K (Two Stage 2 Kits) Sales per unit Costs per unit Direct materials Direct labor Total Net income per unit 21 Your answer is correct. Should Anna's carry the basic introductory kit with undyed and uncut reeds or the Stage 2 kit with reeds already dyed and cut? should carry the Stage 2 K