Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity:
Sales (336,000 units) $4,377,000
Cost of goods sold 2,592,000
Gross profit 1,785,000
Operating expenses 840,000
Net income $945,000
The cost of goods sold was 70% variable and 30% fixed; operating expenses were 80% variable and 20% fixed.
In September, Moonbeam receives a special order for 21,600 toasters at $8.12 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,100 of shipping costs but no increase in fixed costs.
Prepare an incremental analysis for the special order.
