Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating
Question:
Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity:
Sales (336,000 units) | $4,375,000 | ||
Cost of goods sold | 2,596,800 | ||
Gross profit | 1,778,200 | ||
Operating expenses | 840,000 | ||
Net income | $938,200 |
Cost of goods sold was 73% variable and 27% fixed; operating expenses were 83% variable and 17% fixed.
In September, Moonbeam receives a special order for 18,900 toasters at $7.64 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $2,900 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).)
Reject Order | Accept Order | Net Income Increase (Decrease) | |||||
---|---|---|---|---|---|---|---|
Revenues | $enter revenues in dollars | $enter revenues in dollars | $enter revenues in dollars | ||||
Cost of goods sold | enter the cost of goods sold in dollars | enter the cost of goods sold in dollars | enter the cost of goods sold in dollars | ||||
Operating expenses | enter operating expenses in dollars | enter operating expenses in dollars | enter operating expenses in dollars | ||||
Net income | $enter net income in dollars | $enter net income in dollars | $enter net income in dollars |
(b)
Should Moonbeam accept the special order?
Moonbeam Company select an option should acceptshould reject the special order. |
Click if you would like to Show Work for this question: | Open Show Work |