Calla Company produces skateboards that sell for $62 per unit. The company curre

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Calla Company produces skateboards that sell for $62 per unit. The company currently has the capacity to produce 100,000 skateboards per year, but is selling 80,100 skateboards per year. Annual costs for 80,100 skateboards follow Direct materials Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses $ 961, 200 632, 790 948, 000 544, 000 467, 000 $3, 552, 990 A new retail store has offered to buy 19,900 of its skateboards for $57 per unit. The store is in a different market from Calla's regular customers and would not affect regular sales. A study of its costs in anticipation of this additional business reveals the following: . Direct materials and direct labor are 100% variable · 50 percent of overhead is fixed at any production level from 80,100 units to 100,000 units, the remaining 50% of annual overhead costs are variable with respect to volume Selling expenses are 80% variable with respect to number of units sold, and the other 20% of selling expenses are fixed . There will be an additional $2.60 per unit selling expense for this order . Administrative expenses would increase by a $950 fixed amount. Required: Prepare a three-column comparative income statement that reports the following: a. Annual income without the special order b. Annual income from the special order. c. Combined annual income from normal business and the new business. (Do not round your intermediate calculations. Round your cost and expenses to nearest whole number.) CALLA COMPANY COMPARATIVE INCOME STATEMENTS ditional Combined Total Normal Volume Volume $ 4,966,200 ,134,300 6,100,500 Costs and expenses Direct materials Direct labor Overhead Selling expenses Administrative expenses 961,200 632,790 948,000 544,000 467,000 950 467,950

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CALLA COMPANY COMPARATIVE INCOME STATEMENT

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