Question
Concord Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity:
Concord Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity:
Sales ( 364,000 units) | $ 4,374,000 | ||
Cost of goods sold | 2,605,200 | ||
Gross profit | 1,768,800 | ||
Operating expenses | 841,750 | ||
Net income | $ 927,050 |
Cost of goods sold was 70% variable and 30% fixed; operating expenses were 80% variable and 20% fixed. In September, Concord receives a special order for 18,900 toasters at $ 7.64 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $ 2,900 of shipping costs but no increase in fixed costs.
Prepare an incremental analysis for the special order
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