Problem 26-1A (Part Level Submission) (a) & (b) 0 -28700 (c) Problem 26-1A (Part

Question

Problem 26-1A (Part Level Submission)

(a) & (b)

0

-28700

(c)

Problem 26-1A (Part Level Submission)

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 119,400 units. Amount Sales $4,776,000 Cost of goods sold 3,509,190 Selling and administrative expenses 513,516 Net income $753,294
Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $258,000.

In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $27 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

since no fixed costs will be incurred at special order

hence (x - 24..22) = 5.12

x = 29.34

since only variable cost and profit need to be covered so miminum selling price required will be $29.34

since no fixed costs will be incurred at special order

hence (x - 24..22) = 5.12

x = 29.34

since only variable cost and profit need to be covered so miminum selling price required will be $29.34

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