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 results while operating at 80% of plant capacity and producing 119,900 units.

		Amount
Sales		$4,676,100
Cost of goods sold		3,527,059
Selling and administrative expenses		482,601
Net 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 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) 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		$		$		$
Cost of goods sold
Selling and administrative expenses
Net income		$		$		$

(b) Should ThreePoint Sports Inc. accept the special order?

                                                                      YesNo

eTextbook and Media

What is the minimum selling price on the special order to produce net income of $5.03 per ball? (Round answer to 2 decimal places, e.g. 15.25.)

Minimum selling price

$

eTextbook and Media

Answer 1

& Three point sports Inc Reject ordes Accept ordes 290000 214100 27200 $ 48700 Revenues cost of good sold sellinge Admin exp. Net Income vet Income Increase/CDecaed 290000 (2,14,100) (27200) 548700 o 0 (13 Revenue = $29X30,000 - $ 290,000 (2) costof good sold - $3527059 - 960,000 $ 256+059 1,19.900 unit - 21.41 per unit I costof good sold = F 21.41 X 10,000 2,14,100 = - 13) selling a namin exp: $ 482601 -2 44000 B238601 1,19900 - $1.9 (1.99 + 0.73 82.72 x 10,000 $27200)

( olyes CAs it increases net income by $ 48700. (o minimum selling price $29.16 dcument profit per unit - $ 29 - $ 21.41 & 272) $29- 24.13 - $ 4. 87 New Net Income $5.03 peso call curent Net Income Increase in selling price (487) pes ocell 0:16 per unit 7 min. selling price $29 +0.16 $29.16