Wyco Company manufactures toasters. For the first 8 months of 2012, the company reported the following operating results while operating at 75% of plant capacity.
|
Sales (400,000 units) |
$4,000,000 |
|
Cost of goods sold |
2,400,000
|
|
Gross profit |
1,600,000 |
|
Operating expenses |
900,000
|
|
Net income |
$700,000
|
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.