Exercise 20-3

Leno Company manufactures toasters. For the first 8 months of 2014, the company reported the following operating results while operating at 75% of plant capacity:

Sales (351,500 units)$4,383,200Cost of goods sold2,607,000Gross profit1,776,200Operating expenses839,200Net income$937,000

Cost of goods sold was 70% variable and 30% fixed; operating expenses were 75% variable and 25% fixed.

In September, Leno Company receives a special order for 24,600 toasters at $7.9 each from Centro Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,000 of shipping costs but no increase in fixed operating expenses.

Your answer is partially correct.Try again.

Prepare an incremental analysis for the special order.(Round computations for per unit cost to 4 decimal places, e.g. 15.2500 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

OrderAccept

OrderNet Income

Increase

(Decrease)Revenues$

$

$

Cost of goods sold

Operating expenses

Net income$

$

$

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