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Help Save & Sub Cobe Company has already manufactured 24,000 units of Product A at a cost of $15 per unit. The 24,000 units c
Calla Company produces skateboards that sell for $51 per unit. The company currently has the capacity to produce 95,000 skate
Required: Prepare a three column comparative income statement that reports the following a. Annual income without the special
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Answer #1
process
Sell as is further
Sales (5200*108+11400*58) 460,000 1222800
Relevant costs
costs to process further 210,000
total relevant costs 210,000
income(loss) 460,000 1,012,800
incremetal net income (loss) if processed further 552,800 incremental income
the company should process further
Normal Addittional Combined
Volume volume total
Sales 4120800 653200 4774000
costs and expenses
Direct materials 864,560 151,940 1,016,500
Direct labor 589,840 103,660 693,500
overhead 957,000 84,093 1,041,093
Selling expenses 556,000 87,028 643,028
Administrative expense 463,000 900 463,900
total costs and expenses 3,430,400 427,621 3,858,021
operating income 690,400 225,579 915,979
Direct materials 864560/80800*14200= 151940
Direct labor (589840/80800*14200= 103660
overhead (957000*50%)/80200*14200= 84093
Selling expense (556000*60%)/80800*14200   + 2.00*14200= 87028
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