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Sandhill Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2022, the company reported the following operating
Sandhill Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2022, the company reported the following operating results while operating at 80% of plant capacity and producing 120,400 units. Amount $4,816,000 Sales 3,700,304 Cost of goods sold Selling and administrative expenses 492,084 Net income $623,612 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $226,000. In July, normally a slack manufacturing month, Sandhill Sports receives a special order for 10,000 basketballs at $29 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) & (b) Your answer is partially correct. (a) Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places, eg. 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 0 290,000 290,000 Cost of goods sold 0 227,600 i Selling and administrative expenses 0 29,700 Net income $ $ 0 $ 32,700 $ 32,700
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