Reference no: EM131874327
Question - 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 119,700 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 the period were cost of goods sold $1,080,700, and selling and administrative expenses $227,430.
In July, normally a slack manufacturing month, ShurShot Sports receives a special order for 10,600 basketballs at $29 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.49 per unit because of shipping costs but would not increase fixed costs and expenses.
Prepare an incremental analysis for the special order.
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