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Jones Products manufactures and sells to wholesalers approximately 300,000 packages per year of underwater markers at $3.94 per package. Annual costs for the production and
Jones Products manufactures and sells to wholesalers approximately 300,000 packages per year of underwater markers at $3.94 per package. Annual costs for the production and sale of this quantity are shown in the table. $14.000 96. 288,000 Direct materials Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses 120.00 0.000 CON A new wholesaler has offered to buy 50,000 packages for $340 each. These markers would be marketed under the wholesaler's name and would not affect Jones Products sales through its normal channels. A study of the costs of this additional business reveals the following: A new wholesaler has offered to buy 50,000 packages for $3.40 each. These markers would be marketed under the wholesaler's name and would not affect Jones Products' sales through its normal channels. A study of the costs of this additional business reveals the following Direct materials costs are 100% variable. Per unit direct labor costs for the additional units would be 50% higher than normal because their production would require overtime pay at 12 times the usual labor rate. 30% of the normal annual overhead costs are fixed at any production level from 250,000 to 400,000 units. The remaining 70% of the annual overhead cost is variable with volume. Accepting the new business would involve no additional selling expenses. Accepting the new business would increase administrative expenses by a $4,000 fixed amount. Required: Required: Complete the three column comparative income statement that shows the following (Round your intermediate calculations and per unit cost answers to 3 decimals) 1. Annual operating income without the special order 2. Annual operating income received from the new business only 3. Combined annual operating income from normal business and the new business -50-02 Sales Variable costs: | 1 0000 0000 0 0 0 Fixed costs Variable costs 0 000
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