Cost of goods sold was 70 variable and 30 fixed operating

Reference no: EM13581485

Parker Manufacturers produces can openers. For the first six months of 2011, the company reported the following operating results while operating at 80% of plant capacity.

Sales $4,000,000

Cost of goods sold 2,500,000

Gross profit 1,500,000

Operating expenses 1,000,000

Net income $ 500,000

Cost of goods sold was 70% variable and 30% fixed. Operating expenses were 70% variable and 30% fixed. In September 2011, Parker Manufacturers receives a special order for 15,000 can openers at $7.50 from a foreign company. The can openers normally sell for $8.00. Acceptance of the special order would result in $5,000 of shipping costs but no increase in fixed operating expenses.

Instructions: Prepare an incremental analysis for the special order.

Reference no: EM13581485

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