Blue Spruce Inc. manufactures basketballs for professional basketball associations. For the first six months of 2022, the companyreported the following operating results while operating at 90% of plant capacity:SalesCost of goods soldSelling and administrative expensesNet incomeAmount$5,049,0003,465.000445,500$1.138,500Per Unit$51.0035.004.50$11.50Fixed 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 theItalian Basketball Association. Accepting the order would increase variable selling and administrative expenses by $0.75 per unitbecause of shipping costs, but it would not increase fixed costs and expenses. Prepare an incremental analysis for the special order. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to Odecimal places, e.g. 125.)Incremental revenueIncremental cost:Variable COGSVariable S & AAdditional S & AIncremental income$2565003180628830640014

The incremental analysis method of decision-making focuses on the variations in costs and benefits…

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

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

Managerial Accounting

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ISBN:9781337912020

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Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2CMA

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Question

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
Amount
$5,049,000
3,465.000
445,500
$1.138,500
Per Unit
$51.00
35.00
4.50
$11.50
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.

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.)
Incremental revenue
Incremental cost:
Variable COGS
Variable S & A
Additional S & A
Incremental income
$
256500
31806
288306
40014

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