Question

Hoopster Inc. manufactures basketballs. The company's fore casted income statement for the year, before any special orders, is as follows:


Fixed costs included in the forecasted income statement are $4,000,000 in manufacturing cost of goods sold and $400,000 in selling expenses.
A new client placed a special order with Hoopster, offering to buy 100,000 basketballs for $6 each. The company will incur no additional selling expenses if it accepts the special order. Assuming that Hoopster has sufficient capacity to manufacture 100,000 more basketballs, by what amount would differential income increase (decrease) as a result of accepting the specialorder?


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  • CreatedMay 05, 2014
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