CHAPTER 23 PLEASE ANSWER ALL YELLOW SPACES

Jones Products manufactures and sells to wholesalers approximately 100,000 packages per year of underwater markers at $3.92 per package. Annual costs for the production and sale of this quantity are shown in the table.

Direct materials	$	128,000
Direct labor		32,000
Overhead		96,000
Selling expenses		40,000
Administrative expenses		27,000
Total costs and expenses	$	323,000

A new wholesaler has offered to buy 17,000 packages for $3.31 each. These markers would be marketed under the wholesalers name and would not affect Jones Products sales through its normal channels. A study of the costs of this additional business reveals the following:

	Direct materials costs are 100% variable.
	Per unit direct labor costs for the additional units would be 50% higher than normal because their production would require overtime pay at 1 times the usual labor rate.
	25% of the normal annual overhead costs are fixed at any production level from 50,000 to 200,000 units. The remaining 75% of the annual overhead cost is variable with volume.
	Accepting the new business would involve no additional selling expenses.
	Accepting the new business would increase administrative expenses by a $4,000 fixed amount.

Required:

Complete the three-column comparative income statement that shows the following (Round your intermediate calculations and per unit cost answers to 2 decimals)

1.	Annual operating income without the special order.
2.	Annual operating income received from the new business only.
3.	Combined annual operating income from normal business and the new business.