Question
Moonbeam Company manufactures toasters. For the first 8 months of 2017, the company reported the following operating results while operating at 75% of plant capacity:
Moonbeam Company manufactures toasters. For the first 8 months of 2017, the company reported the following operating results while operating at 75% of plant capacity:
Sales (349,300 units) | $4,370,000 | ||
Cost of goods sold | 2,602,000 | ||
Gross profit | 1,768,000 | ||
Operating expenses | 839,500 | ||
Net income | $928,500 |
Cost of goods sold was 77% variable and 23% fixed; operating expenses were 87% variable and 13% fixed. In September, Moonbeam Company receives a special order for 24,400 toasters at $8.38 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. (a) 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 Order | Accept Order | Net Income Increase (Decrease) | |||||
---|---|---|---|---|---|---|---|
Revenues | |||||||
Cost of goods sold | |||||||
Operating expenses | |||||||
Net income |
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