Blue Spruce Inc. manufactures basketballs for professional basketball associations. For the first six months of 2022. reported the following operating results while operating at 90% of plant capacity: Sales Cost of goods sold Selling and administrative expenses Net income Amount $5,049,000 3,465,000 445,500 $1,138,500 Per Unit $51.00 35.00 4.50 $11.50

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Chapter1: Financial Statements And Business Decisions
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Blue Spruce Inc. manufactures basketballs for professional basketball associations. For the first six months of 2022, the company
reported the following operating results while operating at 90% of plant capacity:
Sales
Cost of goods sold
Selling and administrative expenses
Net income
Incremental revenue
Incremental cost:
Fixed costs for the period were cost of goods sold of $990,000, and selling and administrative expenses of $178,200.
In July, normally a slack manufacturing month, Blue Spruce receives a special order for 9,900 basketballs at $32.00 each from the
Italian Basketball Association. Accepting the order would increase variable selling and administrative expenses by $0.75 per unit
because of shipping costs, but it would not increase fixed costs and expenses.
Variable COGS
Prepare an incremental analysis for the special order. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers
to O decimal places, e.g. 125.)
Variable S & A
Prepare an incremental analysis for the special order. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers
to O decimal places, e.g. 125.)
Additional S & A
Incremental income
Amount
$5,049,000
3,465,000
445,500
$
Blue Spruce Inc. should
$1,138,500
Should Blue Spruce Inc. accept the special order?
Minimum selling price $
Per Unit
$51.00
35.00
4.50
$11.50
the special order.
$
What is the minimum selling price on the special order to produce net income of $5.00 per ball? (Round answer to 2 decimal
places, e.g. 15.25.)
Transcribed Image Text:Blue Spruce Inc. manufactures basketballs for professional basketball associations. For the first six months of 2022, the company reported the following operating results while operating at 90% of plant capacity: Sales Cost of goods sold Selling and administrative expenses Net income Incremental revenue Incremental cost: Fixed costs for the period were cost of goods sold of $990,000, and selling and administrative expenses of $178,200. In July, normally a slack manufacturing month, Blue Spruce receives a special order for 9,900 basketballs at $32.00 each from the Italian Basketball Association. Accepting the order would increase variable selling and administrative expenses by $0.75 per unit because of shipping costs, but it would not increase fixed costs and expenses. Variable COGS Prepare an incremental analysis for the special order. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 125.) Variable S & A Prepare an incremental analysis for the special order. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 125.) Additional S & A Incremental income Amount $5,049,000 3,465,000 445,500 $ Blue Spruce Inc. should $1,138,500 Should Blue Spruce Inc. accept the special order? Minimum selling price $ Per Unit $51.00 35.00 4.50 $11.50 the special order. $ What is the minimum selling price on the special order to produce net income of $5.00 per ball? (Round answer to 2 decimal places, e.g. 15.25.)
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