Assignment Culver Manufacturing has an annual capacity of 80,200 units per year.

Question

Assignment Culver Manufacturing has an annual capacity of 80,200 units per year. Currently, the company is making and selling 78,700 units a year. The normal sales price is $104 per unit, varisble costs are $65 per unit, and total fixed expenses are $2,000,000. An out-of-state distributor has offered to buy 5,300 units at $70 per unit. Cuiver's cost structure should not change as a result of this special order By how much will Culver's income change if the company accepts this order? Culver net income will by S If it accepts the special order Click if you would like to Show Work for this questions Open Show work bw Studw Queation Attempts:0 of S used SAVE FOR LATER UBHIT ANSWER ?47 F3 5 8 9

Explanation / Answer

Income statement

Sales (78700* 104)

8184800

-Variable cost (65* 78700)

5115500

Gross profit

3069300

Fixed cost

2000000

Net income

1069300

If company accepts the order the income statement will be

Income statement

Sales (78700* 104) + (5300* 70)

8555800

-Variable cost (65* 84000)

5460000

Gross profit

3095800

Fixed cost

2000000

Net income

1095800

Income will be increased by = 1095800 – 1069300 = 26500

Income statement

Sales (78700* 104)

8184800

-Variable cost (65* 78700)

5115500

Gross profit

3069300

Fixed cost

2000000

Net income

1069300

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