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ThreePoint Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2017, 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 2017, the company reported the following operating results while operating at 80% of plant capacity and producing 120,300 units. Amount Sales $4,812,000 Cost of goods sold 3,494,721 Selling and administrative expenses 492,021 $825,258 Net income Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $243,000. In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $29 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) (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 eg.-45 or parentheses eg. (45).) Net Income Reject Accept Increase Order (Decrease) Order Revenues Cost of goods sold Selling and administrative expenses Net income (b) Should ThreePoint Sports Inc. accept the special order? eTextbook and Media
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