Prepare an incremental analysis for the special order round

Reference no: EM13582969

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 (349,400 units)		$4,379,300
Cost of goods sold		2,598,600
Gross profit		1,780,700
Operating expenses		840,800
Net income		$939,900

Cost of goods sold was 71% variable and 29% fixed; operating expenses were 76% variable and 24% fixed.
In September, Leno Company receives a special order for 23,600 toasters at $8.40 each from Centro Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,070 of shipping costs but no increase in fixed operating expenses.

Prepare an incremental analysis for the special order. (Round computations for per unit cost to 4 decimal places, e.g. 15.2500 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).)

	Reject Order	Accept Order	Net Income Increase (Decrease)
Revenues	$	$	$
Cost of goods sold
Operating expenses
Net income	$	$	$

Should Leno Company accept the special order?

RejectAccept

Reference no: EM13582969

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