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ThreePoint 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.     Amount   Sales   $4,680,000   Cost of goods sold   3,685,200   Selling and administrative expenses   499,200   Net income   $495,600   Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $228,000. In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $27 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.76 per unit because of shipping costs but would not increase fixed costs and expenses.             (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 e.g. -45 or parentheses e.g. (45).)     Reject Order   Accept Order   Net Income Increase (Decrease)   Revenues   $     $     $     Cost of goods sold               Selling and administrative expenses               Net income   $     $     $     (b) Should ThreePoint Sports Inc. accept the special order?  No/Yes

ThreePoint 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.     Amount   Sales   $4,680,000   Cost of goods sold   3,685,200   Selling and administrative expenses   499,200   Net income   $495,600   Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $228,000. In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $27 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.76 per unit because of shipping costs but would not increase fixed costs and expenses.             (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 e.g. -45 or parentheses e.g. (45).)     Reject Order   Accept Order   Net Income Increase (Decrease)   Revenues   $     $     $     Cost of goods sold               Selling and administrative expenses               Net income   $     $     $     (b) Should ThreePoint Sports Inc. accept the special order?  No/Yes

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...
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ThreePoint 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.

    Amount  
Sales   $4,680,000  
Cost of goods sold   3,685,200  
Selling and administrative expenses   499,200  
Net income   $495,600  

Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $228,000.

In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $27 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.76 per unit because of shipping costs but would not increase fixed costs and expenses.
 
 
 
 
 
 

(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 e.g. -45 or parentheses e.g. (45).)

    Reject
Order		   Accept
Order		   Net Income
Increase
(Decrease)		  
Revenues   $
 
   $
 
   $
 
  
Cost of goods sold  
 
  
 
  
 
  
Selling and administrative expenses  
 
  
 
  
 
  
Net income   $
 
   $
 
   $
 
  


(b) Should ThreePoint Sports Inc. accept the special order?

 No/Yes
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