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One of the industrial companies produces and sells product (B). The following is the income statement prepared by the company for the current year: 250000

One of the industrial companies produces and sells product (B). The following is the income statement prepared by the company for the current year:

250000

115000

15000

50000

Sales (25,000 units)

The cost of raw materials

Indirect variable manufacturing costs

Fixed manufacturing costs

70000

Gross profit

7500

12500

10000

35000

Commission sales

Other variable selling costs

Fixed selling costs

Administrative costs

5000

Net profit

The company received an offer from a customer to buy 9,000 units at a price of 8 riyals per unit. The company's unused production capacity is sufficient to cover the order. This order requires additional packaging operations costing 01 riyals per unit in addition to renting a packing machine at a cost of 18,000 riyals, but the company will not bear the variable selling costs of this order.

Required:

Preparing the income statement for the current year on the basis of the contribution.

Do you advise the company to accept the order? Support your opinion with the necessary accounts.

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