Exercise 8-7 The following operating information reports the results of Monty Co

Question

Exercise 8-7 The following operating information reports the results of Monty Company's production and sale of 12,500 air-conditioned motorcycle helmets last year. Based on early market forecasts, Monty expects the same results this year. Sales Variable manufacturing expenses Fixed manufacturing expenses Variable selling and administrative expenses Fixed selling and administrative expenses $2,078,000 837,000 277,000 120,000 224,000 The American Motorcycle Club has offered to purchase 1,900 helmets at a price of $100 each. Monty has sufficient idle capacity to fill the order, which would not affect the company's cost structure or regular sales. If Monty accepts this order, by how much will its income increase or decrease? Operating income will by $

Explanation / Answer

8-7) Incremental analysis :

Operating income will increase by $44536

Note : every question is independent question so pleasse post each question individually for answer

Incremental revenue 190000 Incremental cost Variable manufacturing cost (1900*66.96) 127224 Variable selling and administrative expense (1900*9.6) 18240 Total incremental cost 145464 Incremental profit (loss) 44536

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.