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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 @ 22 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 $.80 per unit (there will be no commissions in the order), but a fixed administrative cost of $7,500 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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