7-1A Use incremental analysis for special order and identify nonfinancial factors in the decision

ThreePoint Sports Inc. manufactures basketballs for the Women's National Basketball Associa

the company reported the following operating results while operating at 80% of plant capacity an

Amount

Fixed

Sales

$4,800,000

Cost of goods sold

3,600,000

$960,000

Selling and administra

405,000

$225,000

Net income

795,000

Fixed costs for the period were cost of goods sold $960,000, and selling and administrative ex

In July, normally a slack manufacturing month. ThreePoint Sports receives a special order for 1

Basketball Association (GBA). Acceptance of the order would increase variable selling and admin

shipping costs but would not increase fixed costs and expenses.

Instructions

(a)

Make an incremental analysis for the special order.

(b)

Should ThreePoint Sports Inc. accept the special order? Explain your answer.

(c)

What is the minimum selling price on the special order to produce net income of $5.00 per