Question
ThreePoint Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2020, the company reported the following operating
ThreePoint Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2020, the company reported the following operating results while operating at 80% of plant capacity and producing119,900units.
AmountSales$4,676,100Cost of goods sold3,527,059Selling and administrative expenses482,601Net income$666,440
Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $244,000.
In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for10,000basketballs at $29each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.73per 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).)
Reject
OrderAccept
OrderNet Income
Increase
(Decrease)Revenues$$$Cost of goods soldSelling and administrative expensesNet income$$$
(b)Should ThreePoint Sports Inc. accept the special order?
No
Yes
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