1. Three-Point Sports Inc. manufactures basketballs for the Women's National Basket- ball Association (WNBA). For the first 6 months of 2020, the company reported the following operating results while operating at 80% of plant capacity and producing 120,000 units. Amount Sales $4,800,000 बंतरा Cost of goods sold 3,600,000 Selling and administrative expenses 405,000 Net income $ 795,000 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $225,000. In July, normally a slack manufacturing month, Three-Point Sports receives a special order for 10,000 basketballs at $28 each from the Gree-k Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.75 per unit because of shipping costs but would not increase fixed costs and expenses. Instructions bbor and a00 in a. Prepare an incremental analysis for the special order. b. Should Three-Point Sports Inc. accept the special order? Explain your answer. C. What is the minimum selling price on the special order to produce net income of $5.00 per ball? d. Shop for for What nonfinancial factors should management consider in making its decision? qu otioa for fixing Printed at Camden County College
1. Three-Point Sports Inc. manufactures basketballs for the Women's National Basket- ball Association (WNBA). For the first 6 months of 2020, the company reported the following operating results while operating at 80% of plant capacity and producing 120,000 units. Amount Sales $4,800,000 बंतरा Cost of goods sold 3,600,000 Selling and administrative expenses 405,000 Net income $ 795,000 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $225,000. In July, normally a slack manufacturing month, Three-Point Sports receives a special order for 10,000 basketballs at $28 each from the Gree-k Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.75 per unit because of shipping costs but would not increase fixed costs and expenses. Instructions bbor and a00 in a. Prepare an incremental analysis for the special order. b. Should Three-Point Sports Inc. accept the special order? Explain your answer. C. What is the minimum selling price on the special order to produce net income of $5.00 per ball? d. Shop for for What nonfinancial factors should management consider in making its decision? qu otioa for fixing Printed at Camden County College
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:1. Three-Point Sports Inc. manufactures basketballs for the Women's National Basket-
ball Association (WNBA). For the first 6 months of 2020, the company reported the
following operating results while operating at 80% of plant capacity and producing
120,000 units.
Amount
Sales
$4,800,000
बंतरा
Cost of goods sold
3,600,000
Selling and administrative expenses
405,000
Net income
$ 795,000
Fixed costs for the period were cost of goods sold $960,000, and selling and
administrative expenses $225,000.
In July, normally a slack manufacturing month, Three-Point Sports receives a special
order for 10,000 basketballs at $28 each from the Gree-k Basketball Association (GBA).
Acceptance of the order would increase variable selling and administrative expenses
$0.75 per unit because of shipping costs but would not increase fixed costs and
expenses.
Instructions
bbor and a00 in
a.
Prepare an incremental analysis for the special order.
b.
Should Three-Point Sports Inc. accept the special order? Explain your answer.
C.
What is the minimum selling price on the special order to produce net income of $5.00
per ball?
d.
Shop for
for
What nonfinancial factors should management consider in making its decision?
qu
otioa for fixing
Printed at Camden County College
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