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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 120,100 units. Sales Cost of goods sold Selling and administrative expenses Net income Amount $4,804,000 3,484,502 448,773 $870,725 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $241,000. 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 $0.77 per unit because of shipping costs but would not increase fixed costs and expenses. (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 Order Accept Order Net Income Increase (Decrease) Revenues $ 0 $ 280000 $ 280000 Cost of goods sold 0 211800 (211800) Selling and administrative expenses 0 241,00 (241,00) Net income $ 0 $ 37500 $ 37500 (c) What is the minimum selling price on the special order to produce net income of $5.06 per ball? (Round answer to 2 decimal places, e.g. 15.25.) Minimum selling price $
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