Reference no: EM132617016

Question - 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 119,900 units.

Amount Sales $4,676,100

Cost of goods sold 3,527,059

Selling and administrative expenses 482,601

Net income $666,440

Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $244,000.

In July, normally a slack manufacturing month, ThreePoint 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 $0.73 per unit because of shipping costs but would not increase fixed costs and expenses.

Required -

(a) Prepare an incremental analysis for the special order.

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