SplishBrothers Sports Inc. manufactures basketballs for the Women's National Basketball 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. Sales Cost of goods sold Selling and administrative expenses Net income Amount $4,680,000 3,582,000 513,400 $584,600 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $271.000. In July, normally a slack manufacturing month, SplishBrothers Sports receives a special order for 10,000 basketballs at $29 each from the Greek 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.

SplishBrothers Sports Inc. manufactures basketballs for the Women's National Basketball 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. Sales Cost of goods sold Selling and administrative expenses Net income Amount $4,680,000 3,582,000 513,400 $584,600 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $271.000. In July, normally a slack manufacturing month, SplishBrothers Sports receives a special order for 10,000 basketballs at $29 each from the Greek 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.

Name: (a) & (b)(a) Prepare an incremental analysis for the special order. (
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Description: (a) & (b)(a) Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places, e.g. 15.25. Enternegative amounts using either a negative sign preceding the number eg. -45 or parentheses e.g. (45).)RevenuesC

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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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

(a) & (b)
(a) Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places, e.g. 15.25. Enter
negative amounts using either a negative sign preceding the number eg. -45 or parentheses e.g. (45).)
Revenues
Cost of goods sold
Selling and administrative
expenses
Net income
Reject
Order
$
(b) Should SplishBrothers Sports Inc. accept the special order?
Accept
Order
$
$
Net Income
Increase
(Decrease)
$
$

SplishBrothers Sports Inc. manufactures basketballs for the Women's National Basketball 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.
Sales
Cost of goods sold
Selling and administrative expenses
Net income
Amount
$4,680,000
3,582,000
513,400
$584,600
Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $271.000.
In July, normally a slack manufacturing month, SplishBrothers Sports receives a special order for 10,000 basketballs at $29 each from
the Greek 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.

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