Conklan Company manufactures outdoor fireplaces. For the first 9 months of 2020, the company reported the following operating results while operating at 80% of plant capacity: Sales (82,200 units) $7,398,000 Cost of goods sold 5.445,750 Gross profit 1,952,250 Operating expenses 822,000 $1,130,250 Net Income Cost of goods sold was 80% variable and 20% fixed: operating expenses were 70% variable and 30% fixed. In October, Conklan Company receives a special order for 3,900 fireplaces at $63 each from Langston's Landscape Company. Acceptance of the order would result in an additional $7,200 of shipping costs but no increase in fixed operating expenses. (a) Prepare an incremental analysis for the special order. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Net Income Increase (Decrease) Revenues Costs Cast of Goods Sold Operating Expenses Shipping Expenses Net Income $ $ Reject order $ $ Accept order $ $
Conklan Company manufactures outdoor fireplaces. For the first 9 months of 2020, the company reported the following operating results while operating at 80% of plant capacity: Sales (82,200 units) $7,398,000 Cost of goods sold 5.445,750 Gross profit 1,952,250 Operating expenses 822,000 $1,130,250 Net Income Cost of goods sold was 80% variable and 20% fixed: operating expenses were 70% variable and 30% fixed. In October, Conklan Company receives a special order for 3,900 fireplaces at $63 each from Langston's Landscape Company. Acceptance of the order would result in an additional $7,200 of shipping costs but no increase in fixed operating expenses. (a) Prepare an incremental analysis for the special order. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Net Income Increase (Decrease) Revenues Costs Cast of Goods Sold Operating Expenses Shipping Expenses Net Income $ $ Reject order $ $ Accept order $ $
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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