Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ProSports manufactures basketballs for professional basketball associations. For the first six months of 2021, the company reported the following operating results while operating at 75%

image text in transcribed
ProSports manufactures basketballs for professional basketball associations. For the first six months of 2021, the company reported the following operating results while operating at 75% capacity. Sales $50.00 Amount Per unit $4,500,000 3,150,000 360,000 $990,000 Cost of goods sold *Selling and administrative expenses 35.00 4.00 Net income $11.00 "includes variable and fixed costs Fixed costs for the period were $900,000 for costs of goods sold and $162,000 for selling and administrative expenses. In July, normally a slow manufacturing month, Pro Sports receives a special order for basketballs at $30 each from the European Basketball Association. Accepting the special order would increase variable selling and administrative expenses by $2.50 per unit because of shipping costs but would not increase fixed costs and expenses. Consider each of the following independent situations: Show all your calculations. a) Assume the special order is for 15,000 units. What is the minimum price Pro Sports should charge, in total, for this special order? ii. if Pro Sports accepts this special order of 15,000 units at $30 per unit by how much will net income increase or decrease? i. Should Pro Sports accept the special order? b) Assume the special order is for 35,000 units. What is the minimum price Pro Sports should charge in total and per unit, for this special order? (hint: compute the total price first) il Should Pro Sports accept the special order

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Audit Risk Alert Employee Benefit Plans Industry Developments 2019

Authors: AICPA

1st Edition

1948306867, 978-1948306867

More Books

Students also viewed these Accounting questions

Question

3. Identify cultural universals in nonverbal communication.

Answered: 1 week ago

Question

2. Discuss the types of messages that are communicated nonverbally.

Answered: 1 week ago