Diamond Corporation produces baseball bats for kids that it sells for $30 each. At capacity, the company can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows: : (Click to view the costs.) Read the requirements. Requirement 1. Suppose Diamond is currently producing and selling 36,000 bats. At this level of production and sales, its fixed costs are the same as given in the preceding table. Gehrig Corporation wants to place a one-time special order for 14,000 bats at $21 each. Diamond will incur no variable selling costs for this special order. Should Diamond accept this one-time special order? Show your calculations. Determine the effect on operating income if the order is accepted. (Enter decreases in operating income with parentheses or a minus sign.) Increase (decrease) in operating income if order is accepted -11-34 (similar to) Diamond Corporation produces baseball bats for kids that its selling 50,000 bats are as follows: (Click to view the costs.) Read the requirements Requirement 1. Suppose Diamond is currently producing and preceding table. Gehrig Corporation wants to place a one-time order. Should Diamond accept this one-time special order? Sho Determine the effect on operating income if the order is accepte IT Contribution margin foregone Fixed manufacturing costs Revenues from special order Total manufacturing costs Total manufacturing costs (less variable selling costs) Variable manufacturing costs Cost per Bat 13 $ Direct materials Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total Costs 650,000 100,000 50,000 150,000 50,000 100,000 1,100,000 22 $ Total costs 1. Suppose Diamond is currently producing and selling 36,000 bats. At this level of production and sales, its fixed costs are the same as given in the preceding table. Gehrig Corporation wants to place a one-time special order for 14,000 bats at $21 each. Diamond will incur no variable selling costs for this special order. Should Diamond accept this one-time special order? Show your calculations. 2. Now suppose Diamond is currently producing and selling 50,000 bats. If Diamond accepts Gehrig's offer it will have to sell 14,000 fewer bats to its regular customers. (a) On financial considerations alone, should Diamond accept this one-time special order? Show your calculations. (b) On financial considerations alone, at what price would Diamond be indifferent between accepting the special order and continuing to sell to its regular customers at $30 per bat? (c) What other factors should Diamond consider in deciding whether to accept the one-time special order