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E25-10 Making special pricing decisions (504) Learning Objective 1 Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hungry-Cardz with a special

E25-10 Making special pricing decisions (504) Learning Objective 1
Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hungry-Cardz with a special order. The Hall of Fame wishes to purchase 55,000 baseball card packs for a special promotional campaign and offers $0.33 per pack, a total of $18,150. Hungry-Cardzs total production cost is $0.53 per pack, as follows:
Variable costs:
Direct materials $0.13
Direct labor 0.04
Variable overhead 0.11
Fixed overhead 0.25
Total cost $0.53
Hungry-Cardz has enough excess capacity to handle the special order.
Requirements
1. Prepare a differential analysis to determine whether Hungry-Cardz should accept the special sales order.
2. Now assume that the Hall of Fame wants special hologram baseball cards. Hungry-Cardz will spend $5,000 to develop this hologram, which will be useless after the special order is completed. Should Hungry-Cardz accept the special order under these circumstances, assuming no change in the special pricing of $0.33 per pack?

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