Reference no: EM132924358

Question - Pina Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2017, 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, Pina 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.

Prepare incremental analysis for the special order.

What is the minimum selling price on the special order to produce net income of $5.03 per ball?