Fixed costs for the period were cost of goods sold 1080000

Assignment Help Accounting Basics

Reference no: EM13481526

Pro Sports Inc. manufactures basketballs for the National Basketball Association (NBA). For the first 6 months of 2008, the company reported the following operating results while operating at 90% of plant capacity and producing 112,500 units.

	Amount
	Sales	$4,500,000
	Cost of goods sold	3,600,000
	Selling and administrative expenses	450,000
	Net income	$450,000

Fixed costs for the period were: Cost of goods sold $1,080,000, and selling and administrative expenses $225,000.

In July, normally a slack manufacturing month, Pro Sports receives a special order for 10,000 basketballs at $28 each from the Italian Basketball Association (IBA). Acceptance of the order would increase variable selling and administrative expenses $0.50 per unit because of shipping costs but would not increase fixed costs and expenses.

Prepare an incremental analysis for the special order.

Reference no: EM13481526

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