Question 1 Leno Company manufactures toasters. For the first 8 months of 2014, t

Question

Question 1 Leno Company manufactures toasters. For the first 8 months of 2014, the company reported the following operating results while operating at 75% of plant capacity: Sales (349,300 units) Cost of goods sold Gross profit Operating expenses Net income $4,377,500 2,601,000 1,776,500 840,200 $936,300 Cost of goods sold was 66% variable and 34% fixed; operating expenses were 71% variable and 29% fixed. In September, Leno Company receives a special order for 17,900 toasters at $8.26 each from Centro Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,090 of shipping costs but no increasein fixed operating expenses y (a) Your answer is partially correct. Try again. 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 147854 147854 Cost of goods sold 87698 87698) Operating expenses 32292 (32292) Net income 27864 27864

Explanation / Answer

Solution:

Revenues

147,854

COGS

87,889

Operating expenses

33,699

Net income

26,266

?

Working:

Sales (349,300 units)

4,377,500

COGS per unit

4.91

2601000*66% = 1,716,660

1716,660/349300 = 4.91

Gross profit

1,776,500

Operating expenses

1.71

840200*71% = 596,542

596,542/349,300 = 1.71

Net income

936,300

Revenues

147,854

17,900 * 8.26

COGS

87,889

17900 * 4.91

Operating expenses

33,699

17900 * 1.71 + 3090

Net income

26,266

?

Revenues

147,854

COGS

87,889

Operating expenses

33,699

Net income

26,266

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.