FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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#5. The following information was developed for Beta Company for the year ended December 31, 2018.
$1,000,000
$540,000
$460,000
$285,000
$175,000
Sales
Variable Expenses
Contribution Margin
Fixed Expenses
Net Income
Beta expected to sell 500,000 cans of fish food by the end of the year.
The local conservation society asked Beta if they could supply 70,000 cans at $1 each.
S Beta's CEO would like to help out but he is concerned about the impact on the bottom line.
7 He asks you to prepare an analysis using the contribution margin technique (Special order technique) and provide
Bhim your recommendation. This is within Beta's capacity to fill.
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Transcribed Image Text:#5. The following information was developed for Beta Company for the year ended December 31, 2018. $1,000,000 $540,000 $460,000 $285,000 $175,000 Sales Variable Expenses Contribution Margin Fixed Expenses Net Income Beta expected to sell 500,000 cans of fish food by the end of the year. The local conservation society asked Beta if they could supply 70,000 cans at $1 each. S Beta's CEO would like to help out but he is concerned about the impact on the bottom line. 7 He asks you to prepare an analysis using the contribution margin technique (Special order technique) and provide Bhim your recommendation. This is within Beta's capacity to fill.
Without Special Order
Special Order
70,000 Units
1
With Special Order
500,000 Units
Per Unit
2 Sales
Variable Expenses
Contribution Margin
Fixed Expenses
6 Operating Income
570,000
3.
4
8
% Increase in Net Income
10
11
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Transcribed Image Text:Without Special Order Special Order 70,000 Units 1 With Special Order 500,000 Units Per Unit 2 Sales Variable Expenses Contribution Margin Fixed Expenses 6 Operating Income 570,000 3. 4 8 % Increase in Net Income 10 11
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