Robert Sports Inc. manufactures basketballs for the National Basketball Association (NBA). For the first 6 months of 2022, the company reported the following operating results while operating at 80% of plant capacity and producing 120,000 units. Sales Cost of goods sold Selling and administrative expenses Net income Amount $4,800,000 3,600,000 405,000 $ 795.000 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $225,000. In July, Robert Sports receives a special order for 10,000 basketballs at $28 each from the Philippine Basketball Association (PBA). 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 a. Prepare an incremental analysis for the special order. a. Nl increase $37,500 b. Should Robert 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. What nonfinancial factors should management consider in making its decision?

Robert Sports Inc. manufactures basketballs for the National Basketball Association (NBA). For the first 6 months of 2022, the company reported the following operating results while operating at 80% of plant capacity and producing 120,000 units. Sales Cost of goods sold Selling and administrative expenses Net income Amount $4,800,000 3,600,000 405,000 $ 795.000 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $225,000. In July, Robert Sports receives a special order for 10,000 basketballs at $28 each from the Philippine Basketball Association (PBA). 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 a. Prepare an incremental analysis for the special order. a. Nl increase $37,500 b. Should Robert 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. What nonfinancial factors should management consider in making its decision?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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