Prepare an incremental analysis for the special order. (Round computations for per unit cost to 2 decimal places, e.g. 15.25 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).)
Prepare an incremental analysis for the special order. (Round computations for per unit cost to 2 decimal places, e.g. 15.25 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).)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:Cullumber Company manufactures toasters. For the first 8 months of 2022, the company reported the following operating results
while operating at 75% of plant capacity:
Sales (358,400 units)
Cost of goods sold
Gross profit
Operating expenses
Net income
(a)
Cost of goods sold was 70% variable and 30% fixed; operating expenses were 80% variable and 20% fixed.
In September, Cullumber receives a special order for 24.500 toasters at $8.38 each from Luna Company of Ciudad Juarez.
Acceptance of the order would result in an additional $2,900 of shipping costs but no increase in fixed costs.
Revenues
Prepare an incremental analysis for the special order. (Round computations for per unit cost to 2 decimal places, e.g. 15.25 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).)
Cost of goods sold
Operating expenses
$4,377.000
2,590,720
1,786.280
837.760
Net income
(b)
$948.520
LA
$
Reject
Order
4377000.00
2590720.00
83760.00
948520.00
Should Cullumber accept the special order?
+A
Cullumber Company should accept the special order.
Accept
Order
4582310.00
2714690.00
886475.00
981145.00
GA
Net Income
Increase
(Decrease)
205310.00
-123970.00
-48715.00
32625.00
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