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Goodfellow Company had the following results of operations for the past year: Sales (8,000 units at $6.80) $54,400 Materials and direct labor (20,000) Overhead (40%
Goodfellow Company had the following results of operations for the past year:
Sales (8,000 units at $6.80) | $54,400 |
Materials and direct labor | (20,000) |
Overhead (40% variable) | (10,000) |
Selling and administrative expenses (all fixed) | (6,000) |
Operating income | $18,400 |
A foreign company (whose sales will not affect Goodfellow's regular sales) offers to buy 2,000 units at $5.00 per unit. In addition to variable manufacturing costs, there would be shipping costs of $1,200 in total on these units. Prepare an analysis of this additional business to show whether Goodfellow should take this order.
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