Goodfellow Company had the following results of operations for the past year: Sales (8,000 units at $6.80)
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Goodfellow Company had the following results of operations for the past year: Sales (8,000 units at $6.80) $54,400 Materials and direct labor (20,000) Overhead (40% variable) (10,000) Selling and administrative expense (all fixed) (6,000) Operating income $18,400.
A foreign company (whose sales will not affect Goodfellow's regular sales) offers to buy 2,000 units at $5.00 per unit. In addition to variable manufacturing costs, there would be shipping costs of $1,200 in total on these units.
Prepare an analysis of this additional business to show whether Goodfellow should take this order.
Related Book For
Managerial Accounting Tools for business decision making
ISBN: 978-0470477144
5th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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