Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Crane Company manufactures toasters. For the first 8 months of 2022, the company reported the following operating results while operating at 75% of plant
Crane Company manufactures toasters. For the first 8 months of 2022, the company reported the following operating results while operating at 75% of plant capacity: Sales (323,400 units) $4,372,000 Cost of goods sold 2,608,760 Gross profit 1,763,240 Operating expenses 840,840 Net income $922,400 Cost of goods sold was 60% variable and 40% fixed; operating expenses were 70% variable and 30% fixed. In September, Crane receives a special order for 24,200 toasters at $7.63 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,100 of shipping costs but no increase in fixed costs. (a) Prepare an incremental analysis for the special order. (Round computations for per unit cost to 2 decimal places, eg. 15.25 and all other computations and final answers to the nearest whole dollar, e.g. 5,725. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Reject Order Accept Order Net Income Increase (Decrease) eceives a special order for 24,200 toasters at 37.00 eachfrom cura Company or crudad Juarez Acceptance on the order would result in an additional $3,100 of shipping costs but no increase in fixed costs. (a) Prepare an incremental analysis for the special order. (Round computations for per unit cost to 2 decimal places, e.g. 15.25 and all other computations and final answers to the nearest whole dollar, e.g. 5,725. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Revenues Cost of goods sold Operating expenses Net income Reject Order Accept Order 0 $ Net Income Increase (Decrease) 184646 $ 1171204 $ $ $ (b) Should Crane accept the special order? Crane Company should accept the special order. 184646 -117120
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started