ThreePoint Sports Inc. manufactures basketballs for the Women’s National Basketball 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 120,300 units.
Amount Sales $4,571,400
Cost of goods sold 3,713,667
Selling and administrative expenses 534,893
Net income $322,840
Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $257,000.
In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $28 each from the Greek 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.
Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places

First and foremost, it is noteworthy that accepting the new order would increase revenue, cost of goods sold as well as the variable selling and administrative expenses.

Selling price per unit=$4,571,400/120,300=$38

variable cost of goods sold per unit=($3,713,667-$960,000)/120,300=$22.89

increase in selling and administrative expenses by unit is $0.75

initial variable selling and administrative expenses per unit=($534,893- $257,000)/120,300=$2.31

revised variable selling and administrative expenses per unit=$2.31 +$0.75=$3.06

Incremental analysis

Increase in revenue($38*10,000) $380,000

increase in cost of goods sold($22.89*10,000) ($228,900)

increase in selling & admin. exp.($3.06*10,000) ($30,600)

incremental profit $120,500