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Ivanhoe 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
Ivanhoe 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 120,000 units. Amount Sales $4,680,000 Cost of goods sold 3,582,000 Selling and administrative expenses 513,400 Net income $584,600 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $271,000. In July, normally a slack manufacturing month, Ivanhoe 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 $0.75 per unit because of shipping costs but would not increase fixed costs and expenses. (a) & (b) - Your answer is partially correct. (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 280,000 280,000 Cost of goods sold 228,200 (228,200) Selling and administrative expenses 30200 (30200) Net income $ 21600 21600 (b) Should Ivanhoe Sports Inc. accept the special order? Yes e Textbook and Media Save for Later Attempts: 2 of 4 used Submit Answer (c) The parts of this question must be completed in order. This part will be available when you complete the part above
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