Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Problem 20-1A ThreePoint Sports Inc, manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2017, the company reported the
Problem 20-1A ThreePoint 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 Sales $4,676,100 3,569,024 Cost of goods sold Selling and administrative expenses 443,437 Net income $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, ThreePoint 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. (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 Cost of goods sold Selling and administrative expenses Net income (b) Should ThreePoint Sports Inc. accept the special order? What is the minimum selling price on the special order to produce net income of $5.08 per ball? (Round answer to 2 decimal places, e.g. 15.25.) Minimum selling prices Click if you would like to Show Work for this question: Open Show Work
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started