Question
Pharoah Inc. manufactures basketballs for professional basketball associations. For the first six months of 2022, the company reported the following operating results while operating
Pharoah 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 $5,416,200 $51.00 Cost of goods sold 3,610,800 34.00 Selling and administrative expenses Net income 435,420 4.10 $1,369,980 $12.90 Fixed costs for the period were cost of goods sold of $1,062,000, and selling and administrative expenses of $191,160. In July, normally a slack manufacturing month, Pharoah receives a special order for 10,620 basketballs at $30.00 each from the Italian Basketball Association. Accepting the order would increase variable selling and administrative expenses by $0.75 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, eg. 15.25 and final answers to O decimal places, e.g. 125.) Incremental revenue Incremental cost: Variable COGS $ Variable S & A Additional S&A Incremental income Should Pharoah Inc. accept the special order? Pharoah Inc. should the special order. 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 $
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