Create an incremental analysis for the special order

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Reference no: EM131914941

Problem

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 (350,700 units) $4,374,000

Cost of goods sold 2,608,000

Gross profit 1,766,000

Operating expenses 840,300

Net income $925,700

Cost of goods sold was 73% variable and 27% fixed; operating expenses were 83% variable and 17% fixed.

In September, Moonbeam Company receives a special order for 18,900 toasters at $7.64 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.

(a) Prepare an incremental analysis for the special order.

Reference no: EM131914941

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