ABC Company manufactures coffee makers. For the first eight months of 2020, the company reported...
80.2K
Verified Solution
Link Copied!
Question
Accounting
ABC Company manufactures coffee makers. For the first eight months of 2020, the company reported the following operating results while operating at 80% of plant capacity: Sales (500,000 units) Cost of goods sold. Gross profit Operating expenses Net income $90,000,000 54,000,000 36,000,000 24,000,000 $12,000,000 An analysis of costs and expenses reveals that variable cost of goods sold is $115 per unit and variable operating expenses are $41 per unit. In September, ABC Company receives a special order for 38,000 machines at $162 each from a major coffee shop franchise. Acceptance of the order would result in $13,000 of shipping costs but no increase in fixed expenses. Instructions (a) Prepare an incremental analysis for the special order. (10 marks) I (b) Should ABC Company accept the special order? Justify your answer. (3 marks) (c) Should ABC Company accept the special order if ABC Company receives a special order for 38,000 machines at $120 per unit? Justify your answer. (7 marks)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
