Question
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, eg 5,725. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) Revenues Cost of goods sold Operating expenses Net income Reject Order $ Accept Order (b) Should Crane accept the special order? Crane Company should reject the special order. 4 should accept Textbook and Media Net Income Increase (Decrease)
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