LAST QUESTION HELP! Problem 26-1A LINK TO TEXT LAST QUESTION HELP! Problem 26-1A
ID: 2524671 • Letter: L
Question
LAST QUESTION HELP!
Problem 26-1A
LINK TO TEXT
LAST QUESTION HELP!
Problem 26-1A
ThreePoint 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, 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.
Explanation / Answer
Req a: Cost of Goods sold: 3,527,059 Less: Fixed 960,000 Variable cost 2,567,059 Variable cost of goods sold 21.41 Total cost of goods sold 3527059 Add: Variable cost per unit for order 214100 (10,000 units @21.41) Total cost of goods sold 3741159 Selling and distribution margin: 482601 Less: Fixed -244000 Varriable 238601 Per unit 1.99 Total Selling and distribution expense Fixed 244,000 Variable (119900*1.99+ 10000*2.72) 265801 Total Selling and distribution expense 509801 DIFFERENTIAL ANALYSIS: REJECT ACCEPT NET INCOME INCREASE (DECREASE) Revenues 4676100 4966100 290000 Cost of goods sold 3527059 3741159 -214100 Selling and distribution expnense 482601 509801 -27200 Net Income 666440 715140 48700 Yes, Three point sports should accept the order. Income increasse through order 48700 Numbere of units 10000 Profit earned from order 4.87 Desired profit 5.03 Income to be increased with 0.16 Revised Sellig gprice 29.16
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.