Question
Ecosolutions income statement is presented below: Contribution Margin Income Statement Per Unit Total Sales $30 $24,000,000 Variable Costs Direct Materials 4 3,200,000 Direct Labor 5
Ecosolutions income statement is presented below: Contribution Margin Income Statement Per Unit Total Sales $30 $24,000,000 Variable Costs Direct Materials 4 3,200,000 Direct Labor 5 4,000,000 Variable Selling Exp. 3 2,400,000 Variable Overhead 4 3,200,000 Total Variable Costs $16 $12,800,000 Contribution Margin $14 $11,200,000 Fixed Costs Selling Costs 1,500,000 Administrative Costs 2,000,000 Total Fixed Costs $3,500,000 Before Tax Income $7,700,000 A special order to purchase 10,000 units @ 21.50 from a good customer is received. The company has the capacity to fulfill the order. If the order is accepted variable selling expenses will be $.50 per unit (there will be no commissions in the order), but a fixed administrative cost of $2,000 will be added to the new order. If the order is accepted what will be the incremental before tax income.
ROUND YOUR ANSWER TO ZERO DECIMAL PLACES DON'T USE COMMA SEPARATORS
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