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Calla Company produces skateboards that sell for $64 per unit. The company currently has the capacity to produce 95,000 skateboards per year, but is selling 81,100 skateboards per year. Annual costs for 81,100 skateboards follow.

Direct materials

$

892,100

Direct labor

705,570

Overhead

946,000

Selling expenses

544,000

Administrative expenses

471,000

Total costs and expenses

$

3,558,670

A new retail store has offered to buy 13,900 of its skateboards for $59 per unit. The store is in a different market from Calla's regular customers and would not affect regular sales. A study of its costs in anticipation of this additional business reveals the following:

Direct materials and direct labor are 100% variable.

40 percent of overhead is fixed at any production level from 81,100 units to 95,000 units; the remaining 60% of annual overhead costs are variable with respect to volume.

Selling expenses are 70% variable with respect to number of units sold, and the other 30% of selling expenses are fixed.

There will be an additional $2.80 per unit selling expense for this order.

Administrative expenses would increase by a $810 fixed amount.

Required:

Prepare a three-column comparative income statement that reports the following:

a. Annual income without the special order.

b. Annual income from the special order.

c. Combined annual income from normal business and the new business. (Do not round your intermediate calculations. Round your cost and expenses to nearest whole number.)

| Untitled document . Google Dc e Get Homework Help weh Che9 x 1 (30250) 5 X html https arts Save 4 (Ch 10-12) A new retall store has offered to buy 13,900 of its skateboards for $59 per unit. The store is in a differen customers and would not affect regular sales. A study of its costs in anticipation of this additional busine Direct materials and direct labor are 100% variable. . 40 percent of overhead is fixed at any production level from 81,100 units to 95,000 units; the remainis costs are variable with respect to volume. Selling expenses are 70% variable with respect to number of units sold, and the other 30% of selling . There will be an additional $2.80 per unit selling expense for this order. Administrative expenses would increase by a $810 fixed amount Required: Prepare a three-column comparative income statement that reports the following: a. Annual income without the special order b. Annual income from the special order c. Combined annual income from normal business and the new business. (Do not round your intermed cost and expenses to nearest whole number.) CALLA COMPANY COMPARATIVE INCOME STATEMENTS Combined Total Normal Volume AdditionalCom Costs and expenses Total costs and expenses Operating income

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