Business, 17.06.2021 22:40 helpmeplzandty

Calla Company produces skateboards that sell for $65 per unit. The company currently has the capacity to produce 90,000 skateboards per year, but is selling 80,400 skateboards per year. Annual costs for 80,400 skateboards follow. A new retail store has offered to buy 9,600 of its skateboards for $60 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 80,400 units to 90,000 units; the remaining 60% of annual overhead costs are variable with respect to volume. Selling expenses are 60% variable with respect to number of units sold, and the other 40% of selling expenses are fixed. There will be an additional $2.8 per unit selling expense for this order. Administrative expenses would increase by a $970 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.

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Calla Company produces skateboards that sell for $65 per unit. The company currently has the capacit...

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