Question
Your answer is partially correct. Cullumber Company manufactures toasters. For the first 8 months of 2022, the company reported the following operating results while
Your answer is partially correct. Cullumber Company manufactures toasters. For the first 8 months of 2022, the company reported the following operating results while operating at 75% of plant capacity: Sales (336,000 units) $4,370,000 Cost of goods sold 2,601,600 Gross profit 1,768,400 Operating expenses 840,000 Net income $928,400 Cost of goods sold was 70% variable and 30% fixed; operating expenses were 80% variable and 20% fixed. In September, Cullumber receives a special order for 24,400 toasters at $8.38 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, e.g. 15.25 and all other computations and final answers to the nearest whole dollar, e.g. 5,725. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Revenues Reject Order Accept Order 4370000 4574472 Net Income Increase (Decrease) 204472 Cost of goods sold 2601000 2733848 132248 Operating expenses 840000 891900 51900 Net income $ 928400 $ 948724 20324 (b) Should Cullumber accept the special order? Cullumber Company should accept the special order.
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