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 (351,800 units)	Â	$4,376,700	Â
Cost of goods sold	Â	2,598,000	Â
Gross profit	Â	1,778,700	Â
Operating expenses	Â	839,600	Â
Net income	Â	$939,100

 

Cost of goods sold was 71% variable and 29% fixed; operating expenses were 76% variable and 24% fixed.

In September, Leno Company receives a special order for 23,800 toasters at $8.2 each from Centro Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,000 of shipping costs but no increase in fixed operating expenses.

 

  Reject Order    Accept Order    Net Income Increase (Decrease)   Revenues   $   $   $   Cost of goods sold         Operating expenses         Net income   $   $   $   Â

 

Show transcribed image text 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: Cost of goods sold was 71% variable and 29% fixed; operating expenses were 76% variable and 24% fixed. In September, Leno Company receives a special order for 23,800 toasters at $8.2 each from Centro Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,000 of shipping costs but no increase in fixed operating expenses.