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.
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Sales (400,000 units)
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$4,000,000
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Cost of goods sold
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2,400,000
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Gross profit
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1,600,000
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Operating expenses
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900,000
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Net income
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$700,000
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Cost of goods sold was 70% variable and 30% fixed. Operating expenses were also 60% variable and 40% fixed.
In September, Wyco Company receives a special order for 40,000 toasters at $6.00 each from Salono Company of Mexico City. Acceptance of the order would result in $8,000 of shipping costs but no increase in fixed operating expenses.
Complete the incremental analysis for the special order.