Question
Coconut Juice Delights produces and sells 75,000 cases annually. The cost breakdown: COST ITEM COSTS PER CASE TOTAL COSTS Variable production costs $22 $1,650,000 Fixed
Coconut Juice Delights produces and sells 75,000 cases annually. The cost breakdown:
COST ITEM | COSTS PER CASE | TOTAL COSTS |
Variable production costs | $22 | $1,650,000 |
Fixed production costs | 10 | 750,000 |
Variable selling costs | 7 | 525,000 |
Fixed selling and admin costs | 5 | 375,000 |
Total costs | $44 | $3,300,000 |
Coconut Juice marks up prices 30% over full costs. It has the capacity to produce 20,000 more cases. A French distributor has offered to purchase 18,000 cases at $60 per case. Additional shipping and selling costs are $4 per case. Prepare the income statement showing the impact of accepting this order.
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