Moonbeam Company manufactures toasters. For the first 8 months
of 2017, the company reported the following operating results while
operating at 75% of plant capacity:
Sales (350,800 units) | $4,370,000 | ||
Cost of goods sold | 2,604,000 | ||
Gross profit | 1,766,000 | ||
Operating expenses | 839,400 | ||
Net income | $926,600 |
Cost of goods sold was 67% variable and 33% fixed; operating
expenses were 77% variable and 23% fixed.
In September, Moonbeam Company receives a special order for 24,500
toasters at $7.68 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 4 decimal
places, e.g. 15.2500 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).)
Reject Order |
Accept Order |
Net Income Increase (Decrease) |
|||||
---|---|---|---|---|---|---|---|
Revenues | $enter a dollar amount | $enter a dollar amount | $enter a dollar amount | ||||
Cost of goods sold | enter a dollar amount | enter a dollar amount | enter a dollar amount | ||||
Operating expenses | enter a dollar amount | enter a dollar amount | enter a dollar amount | ||||
Net income | $enter a dollar amount | $enter a dollar amount | $enter a dollar amount |
(b)
Should Moonbeam Company accept the special order?
Moonbeam Company select an option should rejectshould accept the special order. |
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