Robert Sports Inc. manufactures basketballs for the National Basketball Association (NBA). For the first 6 months of 2022, the company reported the following operating results while operating at 80% of plant capacity and producing 120,000 units. Sales Cost of goods sold Selling and administrative expenses Net income Amount $4,800,000 3,600,000 405,000 $ 795.000 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $225,000. In July, Robert Sports receives a special order for 10,000 basketballs at $28 each from the Philippine Basketball Association (PBA). Acceptance of the order would increase variable selling and administrative expenses $0.75 per unit because of shipping costs but would not increase fixed costs and expenses. Instructions a. Prepare an incremental analysis for the special order. a. Nl increase $37,500 b. Should Robert Sports Inc. accept the special order? Explain your answer. c. What is the minimum selling price on the special order to produce net income of $5.00 per ball? d. What nonfinancial factors should management consider in making its decision?

Robert Sports Inc. manufactures basketballs for the National Basketball Association (NBA). For the first 6 months of 2022, the company reported the following operating results while operating at 80% of plant capacity and producing 120,000 units. Sales Cost of goods sold Selling and administrative expenses Net income Amount $4,800,000 3,600,000 405,000 $ 795.000 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $225,000. In July, Robert Sports receives a special order for 10,000 basketballs at $28 each from the Philippine Basketball Association (PBA). Acceptance of the order would increase variable selling and administrative expenses $0.75 per unit because of shipping costs but would not increase fixed costs and expenses. Instructions a. Prepare an incremental analysis for the special order. a. Nl increase $37,500 b. Should Robert Sports Inc. accept the special order? Explain your answer. c. What is the minimum selling price on the special order to produce net income of $5.00 per ball? d. What nonfinancial factors should management consider in making its decision?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter14: Quality And Environmental Cost Management

Section: Chapter Questions

Problem 1CE: Evans Company had total sales of 3,000,000 for fiscal 20x5. The costs of quality-related activities...

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Evans Company had total sales of 3,000,000 for fiscal 20x5. The costs of quality-related activities are given below. Required: 1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide? 2. Prepare a bar graph and pie chart that illustrate each categorys contribution to total quality costs. Comment on the significance of the distribution. 3. What if, five years from now, quality costs are 7.5 percent of sales, with control costs being 65 percent of the total quality costs? What would your conclusion be?
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1. Three-Point Sports Inc. manufactures basketballs for the Women's National Basket- ball Association (WNBA). For the first 6 months of 2020, the company reported the following operating results while operating at 80% of plant capacity and producing 120,000 units. Amount Sales $4,800,000 बंतरा Cost of goods sold 3,600,000 Selling and administrative expenses 405,000 Net income $ 795,000 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $225,000. In July, normally a slack manufacturing month, Three-Point Sports receives a special order for 10,000 basketballs at $28 each from the Gree-k Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.75 per unit because of shipping costs but would not increase fixed costs and expenses. Instructions bbor and a00 in a. Prepare an incremental analysis for the special order. b. Should Three-Point Sports Inc. accept the special order? Explain…
The following information relates to the Jasmine Company for the upcoming year, based on 418,000 units: Per Unit $ 20.00 16.00 4.00 1.50 $ 2.50 Sales Cost of goods sold Gross margin Operating expenses Operating profits The cost of goods sold includes $2,319,900 of fixed manufacturing overhead; the operating expenses include $209,000 of fixed marketing expenses. A special order offering to buy 68,000 units for $18.60 per unit has been made to Jasmine. Fortunately, there will be no additional fixed expenses associated with the order; however, Jasmine is operating at full capacity. How much will operating profits increase if Jasmine accepts the special order? Multiple Choice O O O $340,000. $170,000. $68,000. Amount $ 8,360,000 6,688,000 1,672,000 627,000 $ 1,045,000 4 Operating profits will not increase as a result of accepting the special order.