Question
Three point mineral company produces 500ml glass water bottles. For the first 6 months of 2017, the company reported the following operating results while operating
Three point mineral company produces 500ml glass water bottles. For the first 6 months of 2017, the company reported the following operating results while operating at 80% of plant capacity and producing 120,000. Amount (dolleer ) Sales 4,800,000 Cost of Goods Sold 3,600,000 Selling and Administrative Expenses 405,000 Net Income 795,000 Fixed cost for the period were cost of goods sold doller 960,000, and selling and administrative expenses doller 225,000. In July, normally a slack manufacturing month, Three point mineral company produces Industries company receives a special order for 10,000 glass water bottles at doller 28 each from a corporate gift company. Acceptance of the order would increase variable selling and administrative expenses doller 0.75 per unit because of shipping costs but would not increase fixed costs and expenses. Required: a) Prepare an incremental analysis for the special order. Should Three point mineral company accept the special order? Explain .
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