Answer:
Step-by-step explanation:
Given:
Units, u = 349,000 units
Cost of goods sold:
variable = 65%
fixed = 35%
Operating expenses:
variable = 75%
fixed = 25%
Cost of goods sold, C = $ 2,590,000
Operating expenses, O = $839,000
Sales, S = $4,370,000
Gross profit, G = $1,780,000
Net income, I = $941,000
Variable cost of goods sold, C1 = Cost sold × variable %
= $ 2,590,000 x 65%
= 1,683,500
Variable cost per unit = Variable cost, C1/units
= 1,683,500 / 349,000
= $4.82 variable cost per unit
Variable Operating expenses, O1 = operating expenses, O × variable %
= $839,000 x 75%
Variable cost per unit = variable operating expenses/units
= 629,250/349,000
= $1.80 variable cost per unit
Incremental analysis:
Given:
Number of toasters, i = 15,000
cost per 1 toaster = $7.50
Revenue, r = (15000 × 7.50)
= $112500
Cost of Goods Sold, Cs = variable cost per unit × units of toasters
= (15,000 x 4.82)
= $72300
Operating Expenses, Os = (variable operating expenses per unit × units of toasters) + additional shipping costs
= (15,000 x 1.8) + 2900
= $27000 + $2900
= $29900
Net Income, N = revenue, r - (cost of goods sold, Cs + operating expenses, Os)
= $112500 - ($72300 + $29900)
= $10,300 gain
B.
Accept the offer.