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 (68,600 units)		$6,105,400
Cost of goods sold		4,544,750
Gross profit		1,560,650
Operating expenses		686,000
Net income		$874,650

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 3,900 fireplaces at $64 each from Langstons Landscape Company. Acceptance of the order would result in an additional $6,800 of shipping costs but no increase in fixed operating expenses.

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 (68,600 units) Cost of goods sold Gross profit Operating expenses Net income $6,105,400 4,544,750 1,560,650 686,000 $874,650 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 3,900 fireplaces at $64 each from Langston's Landscape Company. Acceptance of the order would result in an additional $6,800 of shipping costs but no increase in fixed operating expenses. Prepare an incremental analysis for the special order. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Reject order Accept order Net Income Increase (Decrease) Revenues $ $ Costs Cost of Goods Sold Operating Expenses Shipping Expenses Net Income Should Conklan Company accept the special order? Why or why not? ~, its income is with this order. Before Conklan could give Langston's Landscape Company an answer, they received a special order from Benson Building & Supply for 13,500 fireplaces. Benson is willing to pay $67 per fireplace but they want a special design imbedded into the fireplace that increases cost of goods sold by $55,350. The special design also requires the purchase of a part that costs $5,500 and will have no future use for Conklan Company. Benson Building & Supply will pick up the fireplaces so no shipping costs are involved. Due to capacity limitations, Conklan cannot accept both special orders. Which order should be accepted? Document your decision by preparing an incremental analysis for Benson's order. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Net Income Increase (Decrease) Reject order Accept order Revenues Costs Cost of Goods Sold Operating Expenses Unique part Net Income $ Conklan should accept the order from Click if you would like to Show Work for this question: Open Show Work