Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Current Attempt in Progress Conklan Company manufactures outdoor fireplaces. For the first 9 months of 2020, the company reported the following operating results while operating

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Current Attempt in Progress 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 (77,000 units) Cost of goods sold Gross profit Operating expenses Net income $6,930,000 5,005,000 1.925,000 770,000 $1,155,000 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 freplaces at $62 eachfrom Langston's Landscape Company Acceptance of the order would result in an additional $6,300 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 eg.-2,945 or parentheses e.g. (2,945).) Reject order Net Income Increase (Decrease) Accept order Revenues SA 0 $ 241800 $ 241800 Costs Cost of Goods Sold 0 Operating Expenses 0 Shipping Expenses O Net Income $ 0 Your answer is incorrect Should Conklan Company accept the special order? Why or why not? Yes its income is higher with this order. Before Conklan could give Langston's Landscape Company an answer, they received a special order from Benson Building & Supply for 13,800 fireplaces. Benson is willing to pay $65 per fireplace but they want a special design imbedded into the fireplace that increases cost of goods sold by $56,580. The special design also requires the purchase of a part that costs $4.700 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 6.3.-2,945 or parentheses eg. (2,945)) Reject order Accept order Net Income Increase (Decrease) Revenues 0 $ $ Costs Cost of Goods Sold 0 Operating Expenses 0 Unique part O Net Income $ 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Theories Of Audit Expectations And The Expectations Gap

Authors: Ecaterina Volosin

1st Edition

3640192311, 978-3640192311

More Books

Students also viewed these Accounting questions

Question

Express the number as a ratio of integers. 0.2 = 0.2222

Answered: 1 week ago