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Plz I just need answers.. Dont add anything and dont takeout anything.. Thank you Challenge Exercise 7-1 Conklan Company manufactures outdoor fireplaces. For the first
Plz I just need answers.. Dont add anything and dont takeout anything.. Thank you
Challenge Exercise 7-1 Conklan Company manufactures outdoor fireplaces. For the first 9 months of 2020, the company reported the following operating results while operating at 80% of plant capacity: Sales (81,100 units) Cost of goods sold Gross profit Operating expenses Net income $7,217,900 5,170,125 2,047,775 811,000 $1,236,775 Cost of goods sold was 80% variable and 20% fixed; operating expenses were 70% variable and 30% fixed. In October, Conklan Company receives a special order for 4,400 fireplaces at $60 each from Langston's Landscape Company. Acceptance of the order would result in an additional $6,300 of shipping costs but no increase in fixed operating expenses. Prepare an incremental analysis for the special order. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Net Income Increase (Decrease) Reject order Accept order Revenues 7,217,900 7,481,900 264,000 $ $ $ Costs Cost of Goods Sold 5,170,125.00 5,394,525.00 0 0 Operating Expenses 811,000.00 841,800.00 0 Shipping Expenses 6,300 0 1,236,775 Net Income 1,239,275 2,500 $ $ $ Should Conklan Company accept the special order? Why or why not? Should Conklan Company accept the special order? Why or why not? Yes its income is higher with this order. Before Conklan could give Langston's Landscape Company an answer, they received a special order from Benson Building & Supply for 15,700 fireplaces. Benson is willing to pay $64 per fireplace but they want a special design imbedded into the fireplace that increases cost of goods sold by $75,360. The special design also requires the purchase of a part that costs $5,100 and will have no future use for Conklan Company. Benson Building & Supply will pick up the fireplaces so no shipping costs are involved. Due to capacity limitations, Conklan cannot accept both special orders. Which order should be accepted? Document your decision by preparing an incremental analysis for Benson's order. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Reject order Net Income Increase (Decrease) Accept order Revenues 7,217,900 8,222,700 $ $ 1,004,800.00 $ Costs Cost of Goods Sold 5,170,125 6,046,185 0 Operating Expenses 811,000 920,900 0 Unique part 0 5,100 0 Net Income 1,236,775 1,250,515 13,740 $ $ Conklan should accept the order from Benson Building and Supply Click if you would like to Show Work for this question: Open Show WorkStep by Step Solution
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