exas Controls Incorporated began operations in $20$X$1$ to manufacture a single product. There are no ending work$-$in$-$process inventories. Relevant data for the year follow:

OPERATING DATA FOR $20$X$1$ Quantities: $$ Beginning inventories, finished goods $0$ Units produced during the year $5,700$ Units sold during the year $5,200$ Costs: $$ Direct materials $($$$26$ per unit$)$ $ $148,200$ Direct labor $($$$24$ per unit$)136,800$ Variable factory overhead $($$$12$ per unit$)68,400$ Fixed factory overhead $58,000$ Variable selling and administrative expenses $($$$11$ per unit$)57,200$ Fixed selling and administrative expenses $77,000$ Selling price for each unit $107$

Required:

$1.$ Prepare a partial income statement for $20$X$1$ using direct costing.

$2$a$.$ Assume that the company has an opportunity to sell $500$ units of the product in a foreign country for $$79$ per unit. No fixed or variable selling and administrative expenses would be incurred in connection with these units except shipping costs of $$10$ per unit and miscellaneous administrative expenses of $$1$ per unit. The company has idle capacity, and the order would not affect present markets. Compute marginal income or loss on order.

$2$b$.$ Would it be profitable for the company to accept the order?

Analyze:

What percentage of the foreign sales order would be realized as marginal income?