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ABC Company manufactures coffee makers. For the first eight months of 2020, the company reported...

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Accounting

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ABC Company manufactures coffee makers. For the first eight months of 2020, the company reported the following operating results while operating at 80% of plant capacity: Sales (500,000 units) Cost of goods sold. Gross profit Operating expenses Net income $90,000,000 54,000,000 36,000,000 24,000,000 $12,000,000 An analysis of costs and expenses reveals that variable cost of goods sold is $115 per unit and variable operating expenses are $41 per unit. In September, ABC Company receives a special order for 38,000 machines at $162 each from a major coffee shop franchise. Acceptance of the order would result in $13,000 of shipping costs but no increase in fixed expenses. Instructions (a) Prepare an incremental analysis for the special order. (10 marks) I (b) Should ABC Company accept the special order? Justify your answer. (3 marks) (c) Should ABC Company accept the special order if ABC Company receives a special order for 38,000 machines at $120 per unit? Justify your answer. (7 marks)

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