Reference no: EM132972679

Sheffield 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:

                                                Amount                Per Unit
Sales                                        $4,500,000          $50.00

Cost of goods sold                      3,150,000            35.00

Selling and administrative expenses    369,000          4.10

Net income                                    $981,000        $10.90

• Fixed costs for the period were cost of goods sold of $900,000, and selling and administrative expenses of $162,000.
• In July, normally a slack manufacturing month, Sheffield receives a special order for 9,000 basketballs at $30.00 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.

Problem 1: Prepare an incremental analysis for the special order. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 125.)