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 (349,300 units) | $4,370,000 | ||
Cost of goods sold | 2,602,000 | ||
Gross profit | 1,768,000 | ||
Operating expenses | 839,500 | ||
Net income | $928,500 |
Cost of goods sold was 77% variable and 23% fixed; operating
expenses were 87% variable and 13% fixed.
In September, Moonbeam Company receives a special order for 24,400
toasters at $8.38 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 | $enter a dollar amount | $enter a dollar amount | $enter a dollar amount | ||||
Cost of goods sold | enter a dollar amount | enter a dollar amount | enter a dollar amount | ||||
Operating expenses | enter a dollar amount | enter a dollar amount | enter a dollar amount | ||||
Net income | $enter a dollar amount | $enter a dollar amount | $enter a dollar amount |
(b)
Should Moonbeam Company accept the special order?
Moonbeam Company select an option should acceptshould reject the special order. |
Answer- a)- Net income from special order= $10398.
Explanation- Variable cost of goods sold per unit = ($2602000*77%)/349300 units
= $2003540/349300 units
= $5.7359 per unit
Variable operating expenses per unit = ($839500*87%)/349300 units
= $730365/349300 units
= $2.0909 per unit
- Net income from special order = 24400 units*{$8.38 per unit)-$5.7359 per unit+$2.0909 per unit)-$3100
= $13498-$3100
= $10398
b)- Moonbeam Company should accept the special order due to incremental profit of $10398.
Moonbeam Company manufactures toasters. For the first 8 months of 2017, the company reported the following...
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 (349,300 units) $4,370,000 Cost of goods sold 2,602,000 Gross profit 1,768,000 Operating expenses 839,500 Net income $928,500 Cost of goods sold was 77% variable and 23% fixed; operating expenses were 87% variable and 13% fixed. In September, Moonbeam Company receives a special order for 24,400 toasters at $8.38 each from Luna Company of Ciudad...
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 (349,200 units) $4,375,000 Cost of goods sold 2,595,000 Gross profit 1,780,000 Operating expenses 839,300 Net income $940,700 Cost of goods sold was 77% variable and 23% fixed; operating expenses were 87% variable and 13% fixed. In September, Moonbeam Company receives a special order for 18,500 toasters at $8.03 each from Luna Company of Ciudad...
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 (349,200 units) $4,375,000 Cost of goods sold 2,595,000 Gross profit 1,780,000 Operating expenses 839,300 Net income $940,700 Cost of goods sold was 77% variable and 23% fixed; operating expenses were 87% variable and 13% fixed. In September, Moonbeam Company receives a special order for 18,500 toasters at $8.03 each from Luna Company of Ciudad...
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...
Exercise 21-3 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 (350,500 units) Cost of goods sold Gross profit Operating expenses Net income $4,375,000 2,607,000 1,768,000 840,000 $928,000 Cost of goods sold was 65% variable and 35% fixed; operating expenses were 75% variable and 25% fixed. In September, Moonbeam Company receives a special order for 23,100 toasters at $7.85 each from Luna Company...
PLEASE HELP! Exercise 20-3 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...
Exercise 20-03 Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity: Sales (358,400 units) Cost of goods sold Gross profit Operating expenses Net income $4,370,000 2,600,960 1,769,040 837,760 $931,280 Cost of goods sold was 70% variable and 30% fixed; operating expenses were 80% variable and 20% fixed. In September, Moonbeam receives a special order for 24,500 toasters at $7.68 each from Luna Company of...
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 (349,500 units) Cost of goods sold Gross profit Operating expenses Net income $4,377,000 2,591,000 1,786,000 840,300 $945,700 Cost of goods sold was 77% variable and 23% fixed; operating expenses were 87% variable and 13% fixed. In September, Moonbeam Company receives a special order for 21,600 toasters at $8.12 each from Luna Company of Ciudad...
- Your answer is partially correct. 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 (349.300 units) $4,370.000 Cost of goods sold 2.602.000 Gross profit 1.768.000 Operating expenses 839.500 Net income $928.500 Cost of goods sold was 77% variable and 23% fixed; operating expenses were 87% variable and 13% fixed. In September, Moonbeam Company receives a special order for 24,400 toasters at $8.38...
Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity: Sales (347,200 units) $4,380,000 Cost of goods sold 2,589,120 Gross profit 1,790,880 Operating expenses 837,620 Net income $953,260 Cost of goods sold was 70% variable and 30% fixed; operating expenses were 80% variable and 20% fixed. In September, Moonbeam receives a special order for 18,300 toasters at $7.67 each from Luna Company of Ciudad Juarez....