Exercise 20-3 Your answer is partially correct. Try again Moonbeam Company manuf

Question

Exercise 20-3 Your answer is partially correct. Try again Moonbeam Company manufactures toasters. For the first 8 months of 2017, the company reported the following operating results while operating at 75% of plant capacity Sales (350,800 units) Cost of goods sold Gross profit Operating expenses Net income $4,374,000 2,606,000 1,768,000 841,000 $927,000 Cost of goods sold was 67% variable and 33% fixed; operating expenses were 77% variable and 23% fixed In September, Moonbeam Company receives a special order for 21,100 toasters at $8.04 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an 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 e.g. (45).) Reject Order Accept Order Net Income Increase (Decrease) Revenues Cost of goods sold Operating expenses Net income

Explanation / Answer

Reject order Accept order Net income increase(Decrease) Revenues 0 169644 169644 Cost of goods sold 0 -105021 -105021 Operating expenses 0 -42050 -42050 Net income 0 22573 22573 Workings: Cost of goods sold=(2606000*67%)/350800= $4.9773 Operating expenses=(841000*77%)/350800= $4.9773

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