a) Incremental analysis:

1. Normal selling price: $4,800,000/ $120,000 = $40 per unit

2. Variable cost per unit:

$ 3,600,000−$ 960,000
Variable cost of good sold per unit = = $22
120,000
$ 405,000−$ 225,000
Variable selling and administrative expense per unit: = $1.5
120,000
Increase variable selling and administrative expense $0.75 per unit
 Variable selling and administrative = $1.5 + $0.75 = $2.25
Without the special With the special Different amount
other from GBA other from GBA

Sales revenue $0 $28 x 10,000 = $280,000

$280,000

Costs of good sold $0 $22 x 10,000 = $220,000

$220,000

Selling and $0 $2.25 x 10,000 = $22,500

administrative $22,500
expense

Net income $0 $37,500 $37,500

b) answer:
When ThreePoint Sports Inc. faced to a slack manufacturing month, they shoud accept
the special oder. Because it will increase operating profit by $37,500

c)
Sales = Net income + Costs of good sold + Selling and administrative expense
= 10,000 x $5 + $220,000 + $22,500
= $292,500
Sales $ 292,500
Selling price per unit = = = $29.25
Units Sold 10,000
 d)
The non-financial factors taken into consideration while making the đecision of
accepting or rejecting the order can be explained in the following manner.
The positive or negative effects of the decision on the customers shall be considered
while making the decision.
The willingness of the labor force to work for the extra order shall also be kept in
mind during the decision-making process.
The creditworthiness of the new customer in the market is also a prominent non-
financial factor that shall be considered while making the decision.