Business, 13.03.2020 03:33, andrecoral105

Gregg Company supplies schools with floor mattresses to use in physical education classes. Gregg has received a special order from a large school district to buy 600 mats at $45 each. Acceptance of the special order will not affect fixed costs but will result in $1,200 of shipping costs. For the first 6 months of 2016, the company reported the following operating results while operating at 80% capacity: Sales (100,000 units) $ 7,000,000 Cost of goods sold 4,200,000 Gross profit 2,800,000 Operating expenses 2,000,000 Net income $ 800,000 Cost of goods sold was 75% variable and 25% fixed; operating expenses were 70% variable and 30% fixed.

a. Prepare an incremantal analysis for the special order.
b. Should gregg company accept the special order?

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Gregg Company supplies schools with floor mattresses to use in physical education classes. Gregg has...