Question
Blossom Inc. manufactures basketballs for the Womens National Basketball Association (WNBA). For the first 6 months of 2022, the company reported the following operating results
Blossom 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 118,500 units.
Amount | |||
---|---|---|---|
Sales | $4,503,000 | ||
Cost of goods sold | 3,448,500 | ||
Selling and administrative expenses | 402,750 | ||
Net income | $651,750 |
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, Blossom receives a special order for 10,000 basketballs at $27 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.73 per unit because of shipping costs but would not increase fixed costs and expenses.
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