Problem

Leno Company manufactures toasters. For the first 8 months of 2014, the company reported the following operating results while operating at 75% of plant capacity: Sales (351,500 units) $4,383,200 Cost of goods sold 2,607,000 Gross profit 1,776,200 Operating expenses 839,200 Net income $937,000 Cost of goods sold was 70% variable and 30% fixed; operating expenses were 75% variable and 25% fixed. In September, Leno Company receives a special order for 24,600 toasters at $7.9 each from Centro Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,000 of shipping costs but no increase in fixed operating expenses. Prepare an incremental analysis for the special order. (Round computations for per unit cost to 4 decimal places, e.g. 15.2500 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 $ $ $ Cost of goods sold Operating expenses Net income $ $ $ Should Leno Company accept the special order? Leno should the special order.