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Sheridan Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2022, the company reported the following operating
Sheridan 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 119,400 units. Sales Cost of goods sold Amount $4,656,600 3,684,708 Selling and administrative expenses 526,292 Net income $445,600 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $266,000. In July, normally a slack manufacturing month, Sheridan 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 $0.77 per unit because of shipping costs but would not increase fixed costs and expenses. (a) & (b) (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).) Revenues Cost of goods sold Selling and administrative expenses Net income Reject Order (b) Should Sheridan Inc. accept the special order? Yes +A +A Accept Order Net Income Increase (Decrease) +A +A $
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