a)
Reject order | Accept order | Net Increase (Decrease) | |
Revenue | 0 | (10000*$28)= $280000 | 280000 |
Cost of goods sold | 0 | (10000*21.40)= 214000 | -214000 |
Selling and administrative expense | 0 | (10000*2.89)= 28900 | -28900 |
Net income | 0 | $37100 | $37100 |
As the company is operating at 80% capacity and producing 119300 units that means total capacity is 149125 (119300*100%/80%). So, the company can produce special order of 10000 units without any additional fixed expenses
Variable cost of goods sold per unit= $(3513020-960000)/119300= $21.40
Variable selling and administrative expenses= $(508495-252000)/119300= $2.15
New selling and administrative expenses= $2.15+0.74= $2.89
b) Yes, the company should accept the special order. As if the company accept the special order the net income of the company will increase.
c) Minimum selling price on the special order to produce net income of $5.11 per ball
Net income on the special order= 10000*$5.11= $51100
Calculation of minimum selling price on special order
Sales= Cost of goods sold+Selling and administrative expenses+Net income
= $214000+28900+51100
= $294000
Minimum selling price= $294000/10000= $29.40
ThreePoint Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6...
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 119,100 units. Sales Cost of goods sold Selling and administrative expenses Net income Amount $4,525,800 3,519,459 412,841 $593,500 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $233,000. In July, normally a slack manufacturing month, ThreePoint Sports receives...
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 w operating at 80% of plant capacity and producing 119,400 units. Amount Sales Cost of goods sold Selling and administrative expenses Net income s 4,656,600 3,684,708 526,292 $445,600 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $266,000 In July, normally a slack manufacturing month, ThreePoint Sports...
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. Amount Sales $4,804,000 Cost of goods sold 3,503,718 Selling and administrative expenses 447,783 Net income $852,499 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $228,000. In July, normally a slack manufacturing month, ThreePoint Sports receives...
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 118,500 units. Sales Cost of goods sold Selling and administrative expenses Net income Amount $4,503,000 3,448,500 402,750 $651,750 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...
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...
Problem 21-1A 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 120,400 units. Sales Cost of goods sold Selling and administrative expenses Net income Amount $ 4,816,000 3,700,304 492,084 $ 623,612 Fixed costs for the period were cost of goods sold $ 960,000, and selling and administrative expenses $ 226,000. In July, normally a...
Problem 20-1A 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 119,900 units. Amount Sales $4,676,100 3,569,024 Cost of goods sold Selling and administrative expenses 443,437 Net income $663,639 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $248,000. In July, normally a slack manufacturing month, ThreePoint...
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 118,800 units. Amount Sales $4,514,400 Cost of goods sold 3,633,000 Selling and administrative expenses 517,540 Net income $363,860 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $274,000. In July, normally a slack manufacturing month, ThreePoint Sports receives...
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 119,100 units. Amount Sales $4,525,800 Cost of goods sold 3,519,459 Selling and administrative expenses 412,841 Net income $593,500 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $233,000. In July, normally a slack manufacturing month, ThreePoint Sports receives...
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 118,700 units. Amount Sales $4,748,000 Cost of goods sold 3,582,083 Selling and administrative expenses 503,262 Net income $662,655 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $235,000. In July, normally a slack manufacturing month, ThreePoint Sports receives...