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ThreePoint Sports Inc. manufactures basketballs for the Womens National Basketball Association (WNBA). For the first...

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Question

Accounting

ThreePoint Sports Inc. manufactures basketballs for the Womens National Basketball Association (WNBA). For the first 6 months of 2022, the company reported the following operating results while operating at 80% of plant capacity and producing 120,000 units.

Amount
Sales $4,800,000
Cost of goods sold 3,600,000
Selling and administrative expenses 405,000
Net income $ 795,000

Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $225,000.

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 $0.75 per unit because of shipping costs but would not increase fixed costs and expenses.

Instructions

  1. Prepare an incremental analysis for the special order.

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