Challenge Exercise 7-1 Conklan Company manufactures outdoor fireplaces. For the first 9 months of 2020, the company reported the following operating results while operating at 80% of plant capacity: Sales (69,500 units) Cost of goods sold Gross profit Operating expenses Net income $6,255,000 4,517,500 1,737,500 695,000 $1,042,500 Cost of goods sold was 80% variable and 20% fixed; operating expenses were 70% variable and 30% fixed. In October, Conklan Company receives a special order for 4,100 fireplaces at $63 each from Langston's Landscape Company. Acceptance of the order would result in an additional $6,500 of shipping costs but no increase in fixed operating expenses.