Question: Prepare incremental analysis for special (LO 2) Pro Sports Ine, manufactures basketballs for professional basketball associations. For the first six months of 2020, the
Prepare incremental analysis for special (LO 2) Pro Sports Ine, manufactures basketballs for professional basketball associations. For the first six months of 2020, the company reported the following operating results while operating at 90% of plant capacity: P7.34A order decision and identify non-financial factors in decision. Amount Per Unit Sales $4,500,000 s50.00 Cost of goods sold 3,150,000 35.00 Selling and administrative expenses 360,000 4.00 S 990,000 S11.00 Net income Fixed costs for the period were cost of goods sold of $900.000, and selling and administrative expenses of $162.000. In July, normally a slack manufacturing month, Pro Sports receives a special order for 9,000 basketballs at $30 each from the Italian Basketball Association. Accepting the order would increase variable selling and administrative expenses by $0.50 per unit because of shipping costs, but it would not increase fixed costs and expenses. Instructions a. Prepare an incremental analysis for the special order. Incremental income: $20,700 b. Should Pro Sports Ine. accept the special order? c. What is the minimum selling price on the special order to produce net income of $s.00 per ball? $32.70 d. What non-financial factors should management consider in making its decision?
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