Wyco Company manufactures toasters. For the first 8 months of 2011, the company reported the following operating results while operating at 75% of plant capacity.
Sales (401,630 units) $4,016,300
Cost of goods sold
2,398,560
Gross profit 1,617,740
Operating expenses
895,590
Net income
$722,150
Cost of goods sold was 66% variable and 34% fixed. Operating expenses were also 66% variable and 34% fixed.
In September, Wyco Company receives a special order for 41,000 toasters at $6.60 each from Ortiz Company of Mexico City. Acceptance of the order would result in $8,050 of shipping costs but no increase in fixed operating expenses.
Complete the incremental analysis for the special order. (If an amount is blank enter 0, all boxes must be filled to be correct. If the impact on net income is a decrease use either a negative sign in front of the number, e.g. 45 or parenthesis, e.g. (45). Enter all other amounts as positive amounts and subtract where necessary. Round your answers to 0 decimal places, e.g. 5,210, round your computations of unit costs to 3 decimal places, e.g. 5.525.)
Reject Order Accept Order Net Income
Increase
(Decrease)
Revenues
Cost of goods sold
Operating expense
Net income
Wyco Company should reject/accept the special order.
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