Problem 7-1A_ShurShot Sports Inc._Accept or reject the order

Problem 7-1A (Part Level Submission)

ShurShot Sports Inc. manufactures basketballs for the National Basketball Association (NBA). For the first 6 months of 2014, the company reported the following operating results while operating at 80% of plant capacity and producing 119,800 units.

                                                                                    Amount
Sales                                                                          $5,031,600
Cost of goods sold                                                     3,686,450
Selling and administrative expenses                        596,604
Net income                                                                    $748,546

Fixed costs for the period were cost of goods sold $1,080,800, and selling and administrative expenses $298,302.

In July, normally a slack manufacturing month, ShurShot Sports receives a special order for 10,800 basketballs at $28 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.50 per unit because of shipping costs but would not increase fixed costs and expenses.
Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places, e.g. 15.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Reject
Order Accept 
Order Net Income 
Increase
(Decrease)

Revenues $ $ $
Cost of goods sold
Selling and administrative expenses
Net income $ $ $