Business
Business, 08.09.2021 16:50, NateOLit

A new retail store has offered to buy 13,700 of its skateboards for $48 per unit. The store is in a different market from Calla's regular customers and would not affect regular sales. A study of its costs in anticipation of this additional business reveals the following: Direct materials and direct labor are 100% variable. 50 percent of overhead is fixed at any production level from 81,300 units to 95,000 units; the remaining 50% of annual overhead costs are variable with respect to volume. Selling expenses are 80% variable with respect to number of units sold, and the other 20% of selling expenses are fixed. There will be an additional $2.10 per unit selling expense for this order. Administrative expenses would increase by a $960 fixed amount. Prepare a three-column comparative income statement that reports the following:

a. Annual income without the special order.
b. Annual income from the special order.

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A new retail store has offered to buy 13,700 of its skateboards for $48 per unit. The store is in a...

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