ThreePoint Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). During 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 slow production month, ThreePoint Sports receives a special order of 10,000 basketballs at $29 each from the Greek Basketball Association (GBA). Accepting the order would increase variable SG&A by $0.77 per unit due to shipping costs, but would not increase fixed costs and expenses.

Part 1

(a) Prepare an incremental analysis for the special order. (Round all unit calculations to 2 decimal places, for example, 15.25. Enter negative amounts by using a negative sign before the number, for example, -45, or parentheses, for example, (45).)

		Reject Order		Accept Order		Net income Increase (Decrease)
Income		$enter income in dollars		$enter income in dollars		$enter income in dollars
cost of goods sold		Enter the cost of goods sold in dollars.		Enter the cost of goods sold in dollars.		Enter the cost of goods sold in dollars.
Selling and administrative expenses		Enter selling and administrative expenses in dollars.		Enter selling and administrative expenses in dollars.		Enter selling and administrative expenses in dollars.
Net Income		$enter the net income in dollars		$enter the net income in dollars		$enter the net income in dollars

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

select between Yes and NoYesNo YesNo

Electronic textbook and media

• electronic textbook

Part 2

What is the minimum sales price on the special order to generate a net income of $5.11 per ball? 

minimum sale price

$enter the minimum sale price rounded to 2 decimal places

Answer rating: 100% (QA)

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