Pear Juice Delights produces and sells 75,000 cases annually. The cost breakdown:COST ITEMCOSTS PER CASETOTAL COSTSVariable...
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Accounting
Pear Juice Delights produces and sells 75,000 cases annually. The cost breakdown:
COST ITEM | COSTS PER CASE | TOTAL COSTS |
Variable production costs | $21 | $1,575,000 |
Fixed production costs | 10 | 750,000 |
Variable selling costs | 7 | 525,000 |
Fixed selling and admin costs | 5 | 375,000 |
Total costs | $43 | $3,225,000 |
Pear Juice marks up prices 25% over full costs. It has the capacity to produce 15,000 more cases. A French distributor has offered to purchase 12,000 cases at $55 per case. Additional shipping and selling costs are $4 per case. Prepare the income statement showing the impact of accepting this order.
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