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Wallway Company manufactures toasters. For the first 8 months of 2002, the company reported the following operating results while operating at 75% of plant capacity:
Wallway Company manufactures toasters. For the first 8 months of 2002, the company reported the following operating results while operating at 75% of plant capacity: Sales (437,500 units) Cost of Goods Sold Gross Profit Operating expenses Net Income $4,375,000 2,500,000 1,875,000 875,000 $1,000,000 Cost of goods sold was 70% variable and 30% fixed; operating expenses were also 70% variable and 30% fixed. In September, Wallway Company receives a special order for 15,000 toasters at $6.00 each from Colina Company of Mexico City. Acceptance of the order would result in $3,000 of shipping costs but no increase in fixed costs. a. Prepare an incremental analysis for the special order. Should Wallway accept the special order? Why? b
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