Carney Company manufactures cappuccino makers. For the first eight months of 2010, the company reported the following operating results while operating at 80% of plant capacity: Sales (500,000 units) Cost of goods sold Gross profit Operating expenses Net income $90,000,000 54,000,000 36,000,000 24.000.000 $12.000.000 An analysis of costs and expenses reveals that variable cost of goods sold is $95 per unit and variable operating expenses are $35 per unit. In September, Carney Company receives a special order for 30,000 machines at $135 each from a major coffee shop franchise. Acceptance of the order would result in $10,000 of shipping costs but no increase in fixed expenses. Revenues Cost of Goods Sold Operating Expense Net Income Prepare an incremental analysis for the special order Reject Order Accept Order

Carney Company manufactures cappuccino makers. For the first eight months of 2010, the company reported the following operating results while operating at 80% of plant capacity: Sales (500,000 units) Cost of goods sold Gross profit Operating expenses Net income $90,000,000 54,000,000 36,000,000 24.000.000 $12.000.000 An analysis of costs and expenses reveals that variable cost of goods sold is $95 per unit and variable operating expenses are $35 per unit. In September, Carney Company receives a special order for 30,000 machines at $135 each from a major coffee shop franchise. Acceptance of the order would result in $10,000 of shipping costs but no increase in fixed expenses. Revenues Cost of Goods Sold Operating Expense Net Income Prepare an incremental analysis for the special order Reject Order Accept Order

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 16E

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

Carney Company manufactures cappuccino makers. For the first eight months of 2010, the company reported the following
operating results while operating at 80% of plant capacity:
Sales (500,000 units)
Cost of goods sold
Gross profit
Operating expenses
Net income
Revenues
Cost of Goods Sold
Operating Expense
$90,000,000
54,000,000
36,000,000
An analysis of costs and expenses reveals that variable cost of goods sold is $95 per unit and variable operating expenses are
$35 per unit.
In September, Carney Company receives a special order for 30,000 machines at $135 each from a major coffee shop franchise.
Acceptance of the order would result in $10,000 of shipping costs but no increase in fixed expenses.
Prepare an incremental analysis for the special order
Reject Order
Net Income
24,000,000
$12,000,000
Accept Order

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