Cost Classifications IncStains produces wood stains and sells through independent hardware stores.

In 2017, they produced and sold 295,000 gallons at $14 per gallon. Income Statement Y/E 12/31/2017

Sales

$4,130,000 Less, Cost of Goods Sold

2,902,000 Gross profit

$1,228,000 Less, Selling & Administrative Expenses:

Selling $805,000

Administrative 340,000 1,145,500 Net Income

$82,500

Gross profit margin = $1,228,000 $4,130,000 = 29.7% The VP of Sales, Rob Appenzeller, has just negotiated deals with several large construction companies. He estimates sales will increase in 2018 by 50,000 gallons (at a reduced price on these orders of $12.00 per gallon.) Rob presented a rough estimate of the financial impact on the company:

Additional Sales (gallons) 50,000 Selling price per gallon $12.00 Incremental Revenue $600,000 Gross profit % 29.734

Incremental Profit $178,404

Everyone was very impressed. You are an accounting intern at IncStains. You question the calculation: Fixed production costs, like rent and depreciation, are about $1,250,000 per year. Shipping costs, a selling expense, is around $0.50 per gallon. If we look at things on a variable costing basis we may see a different result. Do it. How much more profit, if any, will the company make? Write a memo to Rob, explaining the difference

My question is which book this question come from can anyone help me? I need to know know the book name