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Sandhill, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $3,500 from sales $201,000, variable
Sandhill, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $3,500 from sales $201,000, variable costs $174,000, and fixed costs $30,500. If the Big Bart line is eliminated, $19,400 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg.(45).) Net Income Increase (Decrease) Continue Eliminate Sales $ $ Variable costs Contribution margin Fixed costs $ Net Income /(Loss) $ The Big Bart product line should be Wildhorse 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 (369,600 units) Cost of goods sold Gross profit Operating expenses Net income $4,372,000 2,597,760 1,774,240 836,220 $938,020 Cost of goods sold was 70% variable and 30% fixed; operating expenses were 80% variable and 20% fixed. In September, Wildhorse receives a special order for 21,800 toasters at $7.80 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 2 decimal places, s. 15.25 and all other computations and final answers to the nearest whole dollar, eg. 5,725. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) Reject Order Accept Order Net Income Increase (Decrease) $ Revenues $ $ Cost of goods sold Operating expenses Net income $ (b) Should Wildhorse accept the special order? the special order. Wildhorse Company
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