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Sports R Us produces basketballs. Recently the local in-house team contacted them about purchasing 2,000 basketballs and has agreed to pay $18 per ball plus
Sports R Us produces basketballs. Recently the local in-house team contacted them about purchasing 2,000 basketballs and has agreed to pay $18 per ball plus $3 per ball for shipping. The current year's production is 22,000 basketballs and total capacity is 25,000 balls. The following costs pertain to the production of basketballs. Direct Materials $9.20 Direct Labor $4.00 VOH $3.80 FOH $4 Cost per ball $20.64 Prepare an incremental analysis. Should Sports R Us accept the special Order? Why?
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