Question
Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity:
Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity:
Sales (358,400 units) |
| $4,374,000 |
|
Cost of goods sold |
| 2,600,960 |
|
Gross profit |
| 1,773,040 |
|
Operating expenses |
| 837,760 |
|
Net income |
| $935,280 |
|
Cost of goods sold was 70% variable and 30% fixed; operating expenses were 80% variable and 20% fixed.
In September, Moonbeam receives a special order for 21,100 toasters at $8.04 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,100 of shipping costs but no increase in fixed costs.
Reject order Accept order Net income increase(decrease)
Revenues
Cost of Goods Sold
Operating Expenses
Net income
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