Leno Company manufactures toasters
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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.
11 years ago
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