ShurShot Sports Inc. manufactures basketballs for the National Basketball Association (NBA). For the first 6 months of 2014, the company reported the following operating results while operating at 80% of plant capacity and producing 119,500 units.
Amount
Sales $4,541,000
Cost of goods sold 3,654,830
Selling and administrative expenses 494,730
Net income $391,440
Fixed costs for the period were cost of goods sold $1,080,800, and selling and administrative expenses $247,365.
In July, normally a slack manufacturing month, ShurShot Sports receives a special order for 10,400 basketballs at $30 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.51 per unit because of shipping costs but would not increase fixed costs and expenses.
(a)Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places, e.g. 15.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Reject
Order Accept
Order Net Income
Increase
(Decrease)
Revenues $ $ $
Cost of goods sold
Selling and administrative expenses
Net income $ $ $