Pro Sports Inc. manufactures basketballs for professional basketball associations. For the first six months of 2020, the company reported the following operating results while operating at 90% of plant capacity:

		Amount		Per Unit
Sales		$4,500,000		$50.00
Cost of goods sold		3,150,000		35.00
Selling and administrative expenses		369,000		4.10
Net income		$981,000		$10.90

Fixed costs for the period were cost of goods sold of $900,000, and selling and administrative expenses of $162,000. In July, normally a slack manufacturing month, Pro Sports receives a special order for 9,000 basketballs at $30 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.

(a)

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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				$
Incremental cost:
Variable COGS		$
Variable S & A
Additional S & A
Incremental income				$

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(b)

Should Pro Sports Inc. accept the special order?

Pro Sports Inc. should

acceptreject

the special order.

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