Texas Controls Inc. began operations in 20X1 to manufacture a single product. There are no ending work-in-process inventories. Relevant data for the year follow: OPERATING DATA FOR 20X1 Quantities: Beginning inventories, finished goods Units produced during the year Units sold during the year Costs: Direct materials ($23 per unit). Direct labor ($21 per unit) Variable factory overhead ($11 per unit) Fixed factory overhead Variable selling and administrative expenses ($10 per unit) Fixed selling and administrative expenses Selling price for each unit Required: 1. Prepare an income statement for 20X1 using direct costing. -0- 5,550 5,100 $127,650 116,550 61,050 55,000 51,000 74,000 98 2a. Assume that the company has an opportunity to sell 450 units of the product in a foreign country for $71 per unit. No fixed or variable selling and administrative expenses would be incurred in connection with these units except shipping costs of $9 per unit and miscellaneous administrative expenses of $1 per unit. The company has idle capacity, and the order would not affect present markets. Compute marginal income or loss on order. 2b. Would it be profitable for the company to accept the order? Analyze: What percentage of the foreign sales order would be realized as marginal income?

Texas Controls Inc, began operations in 201 to manufacture a single product. There are no ending work-in-process inventories. Relevant data for the year follow: OPERATICG DATA FOR 201 Quantities: Beginning inventorses, finished goods Units produced during the year Units sold during the year Costs? Direct materials (\$23 per unit) Direct labor (\$21 per unit) Variable factory overhead (\$11 per unit) Fixed factory overhead Variable setuing and adninistrative expenses (\$10 per unit) 51,000 selling price for each unit 98 Required: 1. Prepare an Income statement for 201 using direct costing 2a. Assume that the company has an opportunity to sell 450 units of the product in a foreign country for $71 per unit. No fixed or variable seling and administrative expenses would be incurred in connection with these units except shipping costs of $9 per unit and miscellaneous administrative expenses of $1 per unit. The company has idle capacity, and the order would not affect present markets. Compute marginal income or loss on order 2b. Would It be profitable for the company to accept the order? Analyze: What percentage of the foreign saies order would be realized as marginal income