Answer:
a) incremental analysis
normal selling price = $39 per ball
variable costs per unit:
- variable COGS $22.82
- variable S&A $2.18 + $0.77 = $2.95
special order for 10,000 balls at $28
<h2> <u>INCREMENTAL ANALYSIS</u></h2>
without special with special differential
order order amount
sales revenue $0 $280,000 $280,000
COGS $0 $228,200 $228,200
S&A expenses $0 $29,500 $29,500
Net income $0 $22,300 $22,300
b) The special order should be accepted because it increases operating profits by $22,300
c) current margin = $2.23 per ball
sales price to produce net income of $5.16 per ball = $28 + ($5.16 - $2.23) = $30.93 per ball
