moonbean company manufactures toasters. for the first 8 months of 2017, 68%--?Su

Question

moonbean company manufactures toasters. for the first 8 months of 2017, 68%--?Sun 10:22 PM a E le Edit View History Bookmarks Develop Window Help 0 or Register | McNeese Stato Usvesty pple Bog ooge Yanoo Apple Bing Google n Assignment PRINTER VERSION URCES ork Exercise 7-3 Moonbeam Company Sales (349,300 units) Cost of goods sold Gross profit manufactures toasters. For the first 8 months of 2017, the company reported the following operating results while operating at 75% of plant capacity $4,370,000 2,602,000 1,768,000 Study Operating expenses839,500 $928,500 Net income Cost of goods sold was 77% variable and 23% fixed; operating expenses were 87% variable and 13% fixed. In September, Moonbeam Company receives a special order for 24,400 toasters at $8.38 each from Luna Company of Cludad Juarez. Acceptance of the order would result in additional $3,100 of shipping costs but no increase in fixed costs 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 eg. (45).) Net Income

Explanation / Answer

(a)

Cost of goods sold = 2,602,000 * 77% * 24,400 / 349,300 = 139,955

Operating expenses = (839,500 * 87% * 24,400 / 349,300) + 3,100 = 54,119

(b)

Moonbean company should Accept the special order.

Reject order Accept order Net Income Revenues 4,370,000 204,472 (24,400*8.38) 4,574,472 Cost of goods sold 2,602,000 139,955 2,741,955 Operating expenses 839,500 54,119 893,619 Net Income 928,500 10,398 938,898

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