Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Hyper Sports Inc. manufactures basketballs for the National Basketball Association (NBA). For the first 6 months of 2011, the company reported the following operating results
Hyper Sports Inc. manufactures basketballs for the National Basketball Association (NBA). For the first 6 months of 2011, the company reported the following operating results while operating at 90% of plant capacity and Hyperducing 112,500 units. Amount Sales $4,500,000 Cost of goods sold 3,600,000 Selling and administrative expenses 450,000 Net income $450,000 Fixed costs for the period were: Cost of goods sold $1,080,000, and selling and administrative expenses $225,000. In July, normally a slack manufacturing month, Hyper Sports receives a special order for 10,000 basketballs at $28 each from the Italian Basketball Association (IBA). Acceptance of the order would increase variable selling and administrative expenses $0.50 per unit because of shipping costs but would not increase fixed costs and expenses. Prepare an incremental analysis for the special order. (Round all unit computations to 2 decimal places, e.g. 10.50 and your final answers to 0 decimal places, e.g. 125. If answer is zero, please enter 0. Do not leave any fields blank. If amount decreases the income, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Enter all amounts in the columns "Reject Order" and "Accept Order" as positive amounts and subtract where necessary.) Net Income Reject Order Accept Order Increase (Decrease) Revenues $ $ $ Cost of goods sold Selling administrative expenses Net Income $ $ $ Should Hyper Sports Inc. accept the special order? NoYes What is the minimum selling price on the special order to produce net income of $4.10 per ball? (Round intermediate calculations to 2 decimal places, e.g. 25.12 and the answers to 0 decimal places, e.g. 125.) $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started