Reference no: EM133052740

Question - Wildhorse Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2022, 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 3,569,024

Selling and administrative expenses 443,437

Net income $663,639

Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $248,000.

In July, normally a slack manufacturing month, Wildhorse receives a special order for 10,000 basketballs at $28 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.

Required -

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

(b) What is the minimum selling price on the special order to produce net income of $5.08 per ball?