ShurShot Sports Inc. manufactures basketballs for National Basketball Association (NBA). For first 6 months of 2014, the company reported the subsequent operating results while operating at 80 percent of plant capacity and producing 119,700 units.
Amount
Sales $4,788,000
Cost of goods sold 3,651,856
Selling and administrative expenses 454,860
Net income $681,284
Fixed costs for period were cost of goods sold $1,080,700, and selling and administrative expenses $227,430.
In July, usually a slack manufacturing month, ShurShot Sports gets a special order for 10,600 basketballs at $29 each from Greek Basketball Association (GBA). Acceptance of order would increase variable selling and administrative expenses $0.49 per unit because of shipping costs but would not increase fixed costs and expenses.
Create an incremental analysis for the special order.
Reject Order Accept Order Net Income / Increase(Decrease)
Revenues $ $ $
Cost of goods sold
Selling and administrative expenses
Net income $ $ $