In september leno company receives a special order for

Reference no: EM13579839

Leno Company manufactures toasters. For the first 8 months of 2014, the company reported the following operating results while operating at 75% of plant capacity:

Sales (350,900 units)		$4,372,600
Cost of goods sold		2,606,800
Gross profit		1,765,800
Operating expenses		840,000
Net income		$925,800

Cost of goods sold was 67% variable and 33% fixed; operating expenses were 72% variable and 28% fixed.

In September, Leno Company receives a special order for 24,200 toasters at $7.74 each from Centro Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,000 of shipping costs but no increase in fixed operating expenses.

Cost of goods sold was 67% variable and 33% fixed; operating expenses were 72% variable and 28% fixed.

Prepare an incremental analysis for the special order using this format:

Reject Order Accept Order Net Income Increase/Decrease

Revenues

Cogs

Operating Expense

Net Income

Reference no: EM13579839

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