X company manufacture toasters. For the first 8 months of 2010, the company reported the following...

X company manufacture toasters. For the first 8 months of 2010, the company reported the following operating results while operating at 75% of plant capacity:

Sales (350,000 units) $4,375,000

Cost of goods sold $2,600,000

Gross Profit $1,775,000

Operating expenses $840,000

Net Income $935,000

Cost of goods sold was 70% variable and 30% fixed; operating expenses were 75% variable and 25% fixed. In september, X company receives a special order for 15,000 toasters at $7.6. Acceptance of the order would result in additional $3000 of shipping costs but no increase in fixed operating expenses.

a) prepare an incremental analysis for the special order

b) should x company accept the order? why or why not?

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Expert Solution

ekkarill92 answered 10 months ago

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