Question
Kingbird Inc. manufactures basketballs for professional basketball associations. For the first six months of 2022, the company reported the following operating results while operating at
Kingbird Inc. manufactures basketballs for professional basketball associations. For the first six months of 2022, the company reported the following operating results while operating at 90% of plant capacity:
Amount | Per Unit | |||
---|---|---|---|---|
Sales | $4,860,000 | $50.00 | ||
Cost of goods sold | 3,402,000 | 35.00 | ||
Selling and administrative expenses | 437,400 | 4.50 | ||
Net income | $1,020,600 | $10.50 |
Fixed costs for the period were cost of goods sold of $972,000, and selling and administrative expenses of $174,960. In July, normally a slack manufacturing month, Kingbird receives a special order for 9,720 basketballs at $31.00 each from the Italian Basketball Association. Accepting the order would increase variable selling and administrative expenses by $0.25 per unit because of shipping costs, but it would not increase fixed costs and expenses.
Prepare an incremental analysis for the special order. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 125.)
Incremental revenue | $enter a dollar amount | |||
---|---|---|---|---|
Incremental cost: | ||||
Variable COGS | $enter a dollar amount | |||
Variable S & A | enter a dollar amount | |||
Additional S & A | enter a dollar amount | enter a subtotal of the three previous amounts | ||
Incremental income | $enter a total amount |
Question Part Score
--/5
Should Kingbird Inc. accept the special order?
Kingbird Inc. should select an option rejectaccept the special order. |
Question Part Score
--/1
What is the minimum selling price on the special order to produce net income of $4.00 per ball? (Round answer to 2 decimal places, e.g. 15.25.)
Minimum selling price | $enter the minimum selling price in dollars rounded to 2 decimal places |
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