Question
Novak Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2017, the company reported the following
Novak Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2017, the company reported the following operating results while operating at 80% of plant capacity and producing 119,900 units. Amount $4,676,100 Sales Cost of goods sold Selling and administrative expenses Net income 3,569,024 443,437 $663,639 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $248,000. In July, normally a slack manufacturing month, Novak Sports receives a special order for 10,000 basketballs at $28 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. Your answer is partially correct. Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places, e.g. 15.25. If amount decreases net income then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Revenues Cost of goods sold Selling and administrative expenses Reject Order Net income $ $ Accept Order Increase (Decrease) 280000 $ 280000 -217600 i 217600 -23900 i 23900 38500 $ 38500
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