Question
How do I answer the following analysis with the information provided. Cullumber Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first
How do I answer the following analysis with the information provided.
Cullumber Inc. manufactures basketballs for the Women's 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 118,800 units.
Amount | |||
Sales | $4,514,400 | ||
Cost of goods sold | 3,560,532 | ||
Selling and administrative expenses | 468,164 | ||
Net income | $485,704 |
Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $227,000. In July, normally a slack manufacturing month, Cullumber 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 $0.73 per unit because of shipping costs but would not increase fixed costs and expenses.
A. Prepare an incremental analysis for the special order. FILL IN THE BLANKs
Reject order | Accept Order | Net Income Increase* (Decrease) | |
Revenues | 0 | 290,000 | 290,000 |
Cost of goods Sold | 0 | ______________ | _____________ |
Selling and administrative expenses | 0 | 27,600 | 27,600 |
Net Income | 0 | ______________ | ______________ |
B. What is the minimum selling price on the special order to produce net income of $5.08 per ball? $___________
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