Reference no: EM132972188

Sheridan 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 119,400 units.

Amount
Sales $4,656,600
Cost of goods sold $3,684,708
Selling and administrative expenses $526,292
Net income $445,600

Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $266,000.

In July, normally a slack manufacturing month, Sheridan 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 $0.77 per unit because of shipping costs but would not increase fixed costs and expenses.

Problem 1: Should Sheridan Inc. accept te special order?