Question

Question 9 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 (350,800 units) $4,374,000 Cost of goods sold 2,606,000 Gross profit 1,768,000 Operating expenses 841,000 Net income $927,000 Cost of gaods sold was 67 % variable and 33% fixed; operating expenses were 77% variable and 23% fixed In September, Moonbeam Company receives a special order for 21,100 toasters at $8.04 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,1000 of shipping costs but no increase in fixed costs. (a) 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).) Net Income Reject Order Аcсept Order Increase (Decrease) Revenues Cost of goods sold Operating expenses Net income (b) Should Moonbeam Company accept the special order? Moonbeam Company should acept the special order. Open Show Work Click if you would like to Show Work for this question:

Question 9

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 (350,800 units)		$4,374,000
Cost of goods sold		2,606,000
Gross profit		1,768,000
Operating expenses		841,000
Net income		$927,000

Cost of goods sold was 67% variable and 33% fixed; operating expenses were 77% variable and 23% fixed.

In September, Moonbeam Company receives a special order for 21,100 toasters at $8.04 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,100 of shipping costs but no increase in fixed costs.

(a)

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		$		$		$

(b)

Should Moonbeam Company accept the special order?

Moonbeam Company should rejectshould accept the special order.

please help!

Answer 1

No. of units 350800 Analysis of Cost & Sales value Particulars Amount Fix /var Sales COGS $43,74,000 Variable $26.06.000 Fixed Variable $8,41,000 Fixed 67.00 33.00% 77.00% 23.00% Segregated Per unit cost Amount $43,74,000 $12.4686 $17,46,020 $7.4287 $8,59,980 $6,47,570|| $2.3974 $1,93,430 Operating expenses

Special Order: No. Of units 21100 Particulars Per unit Computation Amount Sales $8.04 21100 X 8.04 $1.69.644.00 Less: COGS - Variable $7.4287 21100 x 7.4287 -$1,56,745.57| Less: Operating expenses - Variable $2.397421100 x 2.3974 -$50,585.14| Total -$37,686.71 Less: Additioanal Shipping Cost $3,100.00 Net Benefit -S40,786.71

Moorbeam company should REJECT the special order. Because the selling price is not even able to recover the variable costs.

Particulars Reject Order Accept Order Net Income increase (decrease) Accept Order (Computation) Revenues Cost of Goods Sold Operating Expenses Net Income $43.74,000 $26.06,000 $8.41,000 S9.27,000 $45.43.644.00 $27.65.845.571 $8.91.585.14 $8.86.213.29 $1.69.644.00 4374000 – 169644 $1,59,845.57 2606000 - 156745.57 - 3100 $50.585.14 841000 - 50585.14 S40.786.71