Gregg Company supplies schools with floor mattresses to use in physical education classes. Gregg has received a special order from a large school district to buy 600 mats at $45 each. Acceptance of the special order will not affect fixed costs but will result in $1,200 of shipping costs.
For the first 6 months of 2013, the company reported the following operating results while operating at 80% capacity:
Sales (100,000 units) $7,000,000
Cost of goods sold $4,200,000
Gross profit $2,800,000
Operating expenses $2,000,000
Net income $ 800,000
Cost of goods sold was 75% variable and 25% fixed; operating expenses were 70% variable and 30% fixed.
Required:
(a) Prepare an incremental analysis for the special order.
(b) Should Gregg company accept the special order? Justify your answer.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Gregg Company supplies schools with floor mattresses to use in physical education classes. Gregg has received a special order from a large ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Financial intermediation can break down as a result of: a. the government's granting property rights. b. bank panics. c. free adjustments of interest rates in the loanable funds market. d. a high saving rate.
Answers (1)
Tom and Stacey are work on competing projects at work. They frequently need the same resources at the same time. The coworkers have dealt with the problem for a long time and have come to no resolution.
Answers (1)
Suppose the utility function for a firm manager is U = π + bQ, where Q is output, π is profit, and b is a positive constant.
Answers (1)
Merry Music Inc. and Nayda enter into a contract for Nayda to write six songs for which Merry Music agrees to pay her. Nayda transfers her right to payment under the contract to Omni Artists Agency.
Answers (1)
6. You head the product development division of a major corporation. How can you get the people in your division to come up with ideas for new products?
Answers (1)
New Questions in Business
A company is considering the purchase of a new machine for $48,000. Management predicts that the machine can produce sales of $16,000 each year for the next 10 years.
Answers (1)
Moore's law is often cited in the computer industry because it has held true for over 50 years. what does this rule predict regarding cpu capacity?
Answers (1)
When the consumer uses many evaluative criteria such as fuel economy, acceleration speed, and the availability of extra features, like satellite radio or GPS, to make a decision about purchasing a car, the consumer is doing what?
Answers (1)
How does receiving a bill to be paid next month for services received affect the accounting equation? a. liabilities increase; owner's equity increases b. assets decrease; owner's equity decreases c. liabilities increase; owner's equity decreases d.
Answers (1)
You have $21,600 to invest in a stock portfolio. Your choices are Stock X with an expected return of 14.3 percent and Stock Y with an expected return of 8.1 percent. Your goal is to create a portfolio with an expected return of 12.5 percent.
Answers (1)