Pro Sports Inc. 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:
Per Unit
Sales
Amount
$5,875,200
4,032,000
472,320
$51.00
35.00
Cost of goods sold
Selling and administrative expenses
Net income
4.10
$1,370,880
$11.90
Fixed costs for the period were cost of goods sold of $1.152,000, and selling and administrative expenses of $207,360.
In July, normally a slack manufacturing month, Pro Sports receives a special order for 11.520 basketballs at $32 each from the
Italian Basketball Association. Accepting the order would increase variable selling and administrative expenses by $0.25 per unit
because of shipping costs, but it would not increase fixed costs and expenses.
a) prepare incremental analysis for the special order.
b) what is the minimum selling price on the special order to produce net income of $6.00 per ball?โ
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Pro Sports Inc. manufactures basketballs for professional basketball associations. For the first six...
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