Leno Company manufactures toasters

Leno Company manufactures toasters. For the first 8 months of 2014, the company reported the following operating results while operating at 75% of plant capacity.

Sales revenue (350,000 units)

 

$3,500,000

Cost of goods sold

 

2,600,000

Gross profit

 

900,000

Operating expenses

 

840,000

Net income

 

$ 60,000

 


Cost of goods sold was 70% variable and 30% fixed. Operating expenses were 75% variable and 25% fixed.
In September, Leno Company receives a special order for 15,000 toasters at $7.60 each from Centro Company of Ciudad Juarez. Acceptance of the order would result in $3,000 of shipping costs but no increase in fixed operating expenses.

    • Posted: 4 years ago
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