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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 producing 120,300 units. Sales Cost of goods sold Selling and administrative expenses Net income Amount $4,691,700 3.533,217 509,209 $649,274 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $265,000. In July, normally a slack manufacturing month. ThreePoint Sports 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 $0.73 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 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 eg. -45 or parentheses es (45).) Reject Order Accept Order Net Income Increase (Decrease) 280000 280000 $ Revenues 0 0 213900 213900 Cost of goods sold Selling and administrative expenses 0 730000 -730000 0 $ $ 38500 $ 38500 Net income (b) Should ThreePoint Sports Inc. accept the special order? Yes
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