Question: PLEASE HELP! READ THE QUESTION VERY CAREFULLY AND MAKE THE ANSWER CLEAR. Jones Products manufactures and sells to wholesalers approximately 500,000 packages per year of
Jones Products manufactures and sells to wholesalers approximately 500,000 packages per year of underwater markers at $3.86 per package. Annual costs for the production and sale of this quantity are shown in the table. Direct material Direct labor Overhead $ 640,000 160.000 490.000 200.000 133.000 $1.613,000 Administrative pense Total costs and expenses A new wholesaler has offered to buy 83,000 packages for $3.44 each. These markers would be marketed under the wholesaler's name and would not affect Jones Products' sales through its normal channels. A study of the costs of this additional business reveals the following: - Direct materials costs are 100% variable. Per unit direct labor costs for the additional units would be 50% higher than normal because their production would require overtime pay at 1% times the usual labor rate. 20% of the normal annual overhead costs are fixed at any production level from 450,000 to 600,000 units. The remaining 80% of the annual overhead cost is variable with volume. Accepting the new business would involve no additional selling expenses. Accepting the new business would increase administrative expenses by a $2,000 fixed amount Required Complete the column comparative income statement that shows the following (Round you Intermediate calculations and per unit cost answers to 3 decimals 1. Annual operating income without the special order. 2 Annual operating income received from the new business only. Combined annual operating income from normal business and the new business. Per Un Amount Norma New Business Normal New Business Combined Sales
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