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C D 9,000 $94 19,800 $75 Units sold Selling price per unit Variable cost per unit Fixed cost per unit 49 41 20 20 For
C D 9,000 $94 19,800 $75 Units sold Selling price per unit Variable cost per unit Fixed cost per unit 49 41 20 20 For purposes of simplicity, the firm averages total fixed costs over the total number of units of C and D produced and sold. The research department has developed a new product (E) as a replacement for product D. Market studies show that Tharp Company could sell 11,000 units of E next year at a price of $115; the variable cost per unit of Eis $40. The introduction of product E will lead to a 11% increase in demand for product C and discontinuation of product D. If the company does not introduce the new product, it expects next year's results to be the same as last year's. Compute company profit with products C&D and with products C & E. Net profit with products C&D 502200 Net profit with products C & E 874950 ThreePoint Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2020, the company reported the following operating results while operating at 80% of plant capacity and producing 120,400 units. Amount Sales Cost of goods sold Selling and administrative expenses Net income $4,816,000 3,700,304 492,084 $623,612 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $226,000. In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $29 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.76 per unit because of shipping costs but would not increase fixed costs and expenses. (a) Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places, e.g. 15.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Reject Order Accept Order Net Income Increase (Decrease) Revenues $ O $ 290000 $ 290000 Cost of goods sold -228358.67 -228358.67 Selling and administrative expenses 0 -22173.67 -22173.67 Net income $ 0 $ 39467.66 $ 39467.66
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