Pronghorn Company manufactures toasters For the first 8 months o 2017, the compa

Question

Pronghorn Company manufactures toasters For the first 8 months o 2017, the company reported the ollowing operating results while operating at 75% of plant capacity: Sales (350,800 units) Cost of goods sold2,608,000 Gross profit Operating expenses Net income $4,372,000 1,764,000 839,100 $924,900 Cost of goods sold was 69% variable and 31% fixed; operating expenses were 79% variable and 21% fixed. In September, Pronghorn receives a special order for 24,200 toasters at $7.63 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,100 of shipping costs but Prepare an incre I 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 wh 45 Net Income Increase (Decrease) Reject Revenu Cost of goods sold Operating expenses Net income Polcy 1 2000-2018 John 7:54 PM rP ^ 4x 3/27/2018 o search

Explanation / Answer

Prepare incremental analysis :

Reject order Accept order Net income increase (decrease) Revenue 0 24200*7.63 = 184646 184646 Cost of goods sold 0 (2608000*69%/350800*24200) = (124140.21) (124140.21) Operating expense 0 (839100*79%/350800*24200+3100) = (48829.51) (48829.51) Net income 0 11676 11676

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