ThreePoint Sports Inc. manufactures basketballs for the Womens National Basketball Association (WNBA). For the first...
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Accounting
ThreePoint Sports Inc. manufactures basketballs for the Womens National Basketball Association (WNBA). For the first 6 months of 2022, the company reported the following operating results while operating at 80% of plant capacity and producing 120,000 units.
Amount
Sales
$4,800,000
Cost of goods sold
3,600,000
Selling and administrative expenses
405,000
Net income
$ 795,000
Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $225,000.
In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $28 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.75 per unit because of shipping costs but would not increase fixed costs and expenses.
Instructions
Prepare an incremental analysis for the special order.
Answer & Explanation
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