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Sweet Acacia Inc. manufactures basketballs for professional basketball associations. For the first six months of 2022, the company reported the following operating results while operating
Sweet Acacia Inc. manufactures basketballs for professional basketball associations. For the first six months of 2022, the company reported the following operating results while operating at 90% of plant capacity: Amount Per Unit Sales $5,616,000 $52.00 Cost of goods sold 3,672,000 34.00 Selling and administrative expenses 486,000 4.50 Net income $1,458,000 $13.50 Fixed costs for the period were cost of goods sold of $1,080,000, and selling and administrative expenses of $194,400. In July, normally a slack manufacturing month, Sweet Acacia receives a special order for 10,800 basketballs at $32.00 each from the Italian Basketball Association. Accepting the order would increase variable selling and administrative expenses by $0.50 per unit because of shipping costs, but it would not increase fixed costs and expenses. Prepare an incremental analysis for the special order. (Round per unit calculations to 2 decimal places, eg. 15.25 and final answers to O decimal places, e.g. 125.) Incremental revenue Incremental cost: Variable COGS Variable S & A Additional S & A Incremental income Should Sweet Acacia Inc. accept the special order? Sweet Acacia Inc. should the special order. What is the minimum selling price on the special order to produce net income of $6.00 per ball? (Round answer to 2 decimal places, eg. 15.25.)
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