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 (375,200 units) $4,378,000
Cost of goods sold 2,588,880
Gross profit 1,789,120
Operating expenses 839,510
Net income $949,610
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 20,800 toasters at $7.87 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $2,900 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 2 decimal places, e. g. 15.25 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 revenues in dollars $enter revenues in dollars $enter revenues in dollars Cost of goods sold enter the cost of goods sold in dollars enter the cost of goods sold in dollars enter the cost of goods sold in dollars Operating expenses enter operating expenses in dollars enter operating expenses in dollars enter operating expenses in dollars Net income $enter net income in dollars $enter net income in dollars $enter net income in dollars
(b) Should Moonbeam accept the special order? Moonbeam Company select an option the special order.

Moonbeam Company

a) Incremental analysis for the special order:

Sales revenue ($7.87 * 20,800) =   $163,696

Variable costs ($6.62 * 20,800) =    (137,696)

Contribution margin =                        26,000

Shipping costs                                     (2,900)

Net income from special order =     $23,100

b) Moonbeam should accept the special order.  It generates some net income for covering the company's fixed cost and does not exceed the company's plant capacity.  It only adds about 4% to the operating plant capacity.

Explanation:

a) Data and Calculations:

                                        Total               Variable        Fixed

Sales (375,200 units)  $4,378,000  

Cost of goods sold        2,588,880      1,812,216       776,664

Gross profit                     1,789,120

Operating expenses        839,510        671,608        167,902

Net income                    $949,610

Total costs                                       $2,483,824    $944,566

Selling price = $11.67 ($4,378,000/375,200)

Variable costs per unit = $6.62 ($2,483,824/375,200)

Total plant capacity = 500,267 units (375,200/75%)

Increase in plant capacity = 396,000 (375,200 + 20,800)

one of the appeals of a sole proprietorship is that business expenses are kept separate from your personal income tax return

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20